EU: New German chancellor Merz calls on EU to scrap supply chain law

Chancellor Merz urges scrapping the EU’s supply chain law, citing business burdens, but NGOs warn it’s vital for protecting human and labour rights.

The key points: Germany’s new Chancellor, Friedrich Merz, has called for the EU to cancel the Corporate Sustainability Due Diligence Directive (CSDDD), arguing it places excessive burdens on businesses. He also wants Germany’s own Supply Chain Act revoked. While many employers agree, NGOs and academics insist these laws are essential for protecting human and labour rights in global supply chains.

Why this matters: The CSDDD and related laws are central to the EU’s efforts to promote responsible business conduct and uphold human rights. Scrapping or weakening these laws could undermine protections for workers worldwide and disrupt the growing compliance ecosystem that has developed around them.

What might happen next: It remains unclear whether Merz’s position reflects the entire German coalition government, which includes the SPD. The European Commission has already proposed some simplifications, but Merz’s intervention could trigger a broader debate and possible rollback. Consultancies and businesses will be watching closely for any policy shifts.

What you should be doing: Companies should continue to monitor developments in EU and German supply chain regulation. Those with complex supply chains or significant compliance obligations should maintain their due diligence processes but remain agile in case of regulatory changes. Stay engaged with legal and industry updates to anticipate and adapt to any new requirements.