On 5 May 2025, Germany’s CDU/CSU and the SPD signed off on a coalition agreement, which includes its intention to strike out the German Supply Chain Due Diligence Act as part of efforts to streamline bureaucracy. The coalition agreement is not legislation, and the proposed changes must still undergo the full legislative process before they can take legal effect.
The coalition agreement that was signed has not changed from the version previously agreed between the parties, and which we reported on in our 24 May alert.
About the Coalition Agreement
The coalition agreement provides the framework of policy objectives for the new government. It features a section entitled “Immediate Programme for Reducing Bureaucracy,” in which it outlines the government’s intention to abolish the German Supply Chain Due Diligence Act (Lieferkettengesetz) and to replace it with the EU Corporate Sustainability Due Diligence Directive (CSDDD).
The statement specifies that the reporting obligations under the current Act would be abolished with immediate effect and eliminated entirely. The roadmap further expresses support for the European Commission’s “Omnibus” initiative, which aims to reduce and postpone the requirements of EU sustainability reporting.
The coalition agreement also indicates that existing statutory due diligence obligations will not be subject to sanctions until the new legislation is enacted, with the exception of “serious human rights violations”. While this appears to imply that such violations, whether ongoing or previously reported, will continue to be investigated by the German regulator in accordance with its mandate, this point is not explicitly clarified in the announcement.
Next Steps
The new government was sworn in last week. With Mertz and his cabinet now officially in office, legislative activity on key coalition priorities can proceed. On 9 May, Merz went further and called for the complete repeal of the CSDDD, arguing that postponing its implementation is insufficient.