Ron Leibman, chair of McCarter’s Transportation, Logistics & Supply Chain Management Practice, shares his insights with Best Lawyers on two new EU laws aimed at reshaping global business through ethical supply chains, human rights, and sustainability—the Corporate Sustainability Due Diligence Directive and the EU Forced Labour Regulation. Leibman said human rights were traditionally a political issue that has evolved into a key business risk. He noted that the Corporate Sustainability Due Diligence Directive has board-level interest, particularly when it comes to the potential for reputational harm.
“All you can do is make the effort, but that effort is important because without it, nothing ever changes,” Leibman said. “I do believe each of these laws, as they come along, will incrementally change the landscape, and put the idea of sustainability and the importance of our world and our people top-of-mind.”
Leibman suggests companies form a team to ensure compliance with the new regulations. “Companies have to conduct a thorough review of their suppliers, not just their finances, but they need to try to find out as much as possible in these key areas that relate to sustainability,” Leibman says. “The key here is that the act requires remediation to help suppliers improve. It’s critical to have as many people involved on the ground as possible; your salespeople or your stakeholders locally should be your eyes and ears and should be telling you what you need to do to comply. But also remember, supply chain isn’t only comprised of the people in [another] country, it’s also the people in your home office.”