German Supply Chain Due Diligence Act (LkSG)
The LkSG requires companies with 1,000+ employees operating in Germany to identify, prevent and mitigate human rights and environmental risks throughout their supply chains.
What is the LkSG?
The Lieferkettensorgfaltspflichtengesetz (LkSG) — Germany's Supply Chain Due Diligence Act — has been in force since January 2023. It is one of the most comprehensive supply chain laws in Europe, requiring companies to establish due diligence processes for human rights and environmental standards across their entire supplier base.
Initially applying to companies with 3,000+ employees, the threshold dropped to 1,000 employees from January 2024. The law covers both direct (Tier 1) and indirect suppliers, with escalating obligations when substantiated knowledge of violations exists.
Key requirements
The LkSG requires: annual risk analysis across the supply chain; preventive and remedial measures when risks are identified; a complaints procedure accessible to affected parties; and transparent annual reporting to the German Federal Office for Economic Affairs and Export Control (BAFA).
SMEs in the supply chain of affected companies face increasing pressure to provide documentation and demonstrate compliance, even if they are not directly subject to the law.
How SupplyCanvas helps
Achieve full transparency and control over your supply chains with SupplyCanvas. Identify potential risks and implement targeted solutions with ease, thanks to actionable insights tailored to your needs. Our platform helps you meet LkSG reporting obligations with structured supplier data and automated risk assessments.
Ready to comply with the LkSG?
Start managing your supply chain risks today. Book a free call to understand your obligations.