What does the German Supply Chain Act mean for Construction?

The German Supply Chan Act (Lieferkettengesetz), released in draft form in February 2021, is set to come into force in two stages: for relatively larger firms (> 3000 employees) in January 2023 and relatively smaller firms (> 1000 employees) in January 2024. 

This act aims to use the force of law to impel companies to introduce complete transparency in their supply chains and to check for human rights and environmental violations in value-adding steps of their supply chain. 

The implications of the Act for the construction industry are potentially transformative and focused on two major themes: internationalisation and digitalisation. 

1. Internationalisation: the German Supply Chain Act is German law; it doesn’t apply outside of Germany and nor does it have provisions to extend civil liability for firms with suppliers outside of Germany (even though duty of care may apply as we saw). But it represents a standard template that, through the force of Germany’s trade and interconnections with the rest of Europe and the world (especially in construction) must ultimately compel other nations to gradually follow suit with similar legislation (especially if the German Supply Chain Act succeeds in its objectives).
   
   
2. Digitalisation: Since buildings are complex assets with several thousand elements, any move towards successfully complying with the German Supply Chain Act or similar legislation will require a strong concentration of digital processes and technologies across the supply chain. The most important of these would be digital product passports (or material passports), which are described in greater detail in our free whitepaper below. With better digitalisation using product passports, firms can have granular and element-wise oversight and influence over the materials that are used in their built asset, and owners and other post-commissioning parties can have thorough data on building composition, salvageability of materials, and other metrics.

Geometrid has helped several firms modernise and digitalise using Geometrid’s intuitive and easy to use platform—explore how Geometrid accomplished this with a leading specialist contractor in the Middle East with this free case study; or this free case study on how Geoemtrid was a key anchor for Lindner’s process transformation and digitalisation.

Get your free whitepaper from Geometrid on what the German Supply Chain Act is, how it may impact your firm, and how you can be prepared!