On 9 April 2025, Germany’s CDU/CSU bloc and SPD reached a coalition agreement to form a new government. The agreement was negotiated 45 days after Friedrich Merz’s conservatives won a snap election on 23 February, a fast negotiation by German standards.
The 146-page coalition document, also known as a roadmap, is entitled “Verantwortung für Deutschland” or “Responsibility for Germany” and provides the framework for the new government.
Notably, the roadmap includes a section entitled “Immediate Program for Reducing Bureaucracy.” This section includes the new coalition’s intentions to abolish the German Supply Chain Due Diligence Act (Lieferkettengesetz). It states [in an unofficial translation]:
“We will abolish the national Supply Chain Due Diligence Act (LkSG). It will be replaced by a law on international corporate responsibility that implements the EU Corporate Sustainability Due Diligence Directive (CSDDD) in a way that minimises bureaucracy and is easy to enforce. The reporting requirement under the LkSG will be immediately abolished and completely eliminated.”
The roadmap further outlines the new government’s support for the Omnibus proposal, stating:
“The current statutory due diligence obligations will not be sanctioned until the new law comes into force, with the exception of serious human rights violations. We support the Commission’s “Omnibus” initiative to significantly reduce and postpone the extensive requirements regarding the content of EU sustainability reporting, particularly for small and medium-sized businesses.”
We have interpreted this to mean that any serious human rights cases that are either brought or have already been brought to the German regulator of the LkSG will continue to be reviewed and investigated as per the mandate of the regulator under the law. However, this has not been made clear in the announcement.
The roadmap must still win a majority approval from the SDP’s 357,000 members via an online ballot as well as from the leadership of the CDU and CSU. The Financial Times reports that the SDP vote will be held in the next two weeks. Assuming it is approved by the end of April, new chancellor Merz could be sworn in before the Bundestag in early May, according to reporting by The Guardian.
Context
The Supply Chain Due Diligence Act was adopted in June 2021 and came into force in January 2023. The Act includes sanctions for non-compliance, including pecuniary sanctions based on company turnover. Companies with average annual sales of more than €400 million can be issued fines of up to two percent of their average worldwide annual sales.
The Omnibus proposal to amend the CSRD and CSDDD was published on 26 February 2025. On 3 April the European Parliament voted in favour of its proposal to delay the application of the CSRD and CSDDD. It now requires formal approval by the Council of the EU.
Learn more about the EU omnibus regulation and its implication on the CSRD and CSDDD.