Is Supply Chain Innovation Even Possible In An Era Of Tighter Regulation?
SAP News, Tuesday, January 16th, 2024
The world is experiencing a new, tougher business environment. Trade tensions, wars, climate change, and countless other disruptions are putting the brakes on a long and steady period of globalization. Given this growing uncertainty, companies must reconfigure global supply chains to improve their resilience.
Business leaders might assume that more regulation in such a volatile environment would hinder the innovation they require most at this time. However, we will argue smart and balanced regulation can serve as a catalyst for transformation.
Recent regulatory initiatives like the German Supply Chain Due Diligence Act (LkSG), which mandates human rights and environmental impact due diligence, have positioned Germany at the forefront of ethical standards in supply chains. The draft EU Corporate Sustainability Due Diligence Directive (CSDDD) extends corporate responsibilities in sustainability, while the U.S. Uyghur Forced Labor Prevention Act (UFLPA) places the onus on companies to prove that their products are free of forced labor, shifting the burden of proof to importing entities.