The Supply Chain Due Diligence Act

Millions of people worldwide live in poverty due to the lack of social minimum standards. Among them are 79 million children who work under exploitative conditions, such as in textile factories, mines, or in agriculture. The Supply Chain Due Diligence Act (LkSG), also known as the Supply Chain Act, aims to remedy this situation. With our LkSG Management System GLOBAL COMPLIANCE, we assist companies in implementing the legal framework in a software-supported and legally compliant manner.

Fairness and Responsibility in Supply Chains

What is the Supply Chain Due Diligence Act (LkSG)?

The Supply Chain Act (LkSG), which will take effect in Germany from January 1, 2023, aims to intensify the protection of human rights and the environment in global supply chains. Based on internationally recognized standards of conduct and prohibitions, it places a special focus on compliance with fundamental human rights standards, such as the prohibition of child and forced labor. It also includes essential environmental standards, including ensuring that drinking water is not contaminated. The Supply Chain Act imposes due diligence obligations on companies to ensure that human rights are upheld both within their own operations and with contractors and suppliers.
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Who is subject to the LkSG?

The obligations arising from the law apply to companies that have their main administration, principal place of business, administrative headquarters, statutory seat, or branch in Germany and typically employ at least 1,000 employees domestically.
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We provide clarity.

When does the LkSG take effect?

The Act has been in effect since January 1, 2023, initially applicable to companies with at least 3,000 employees, and from 2024 onwards, it also applies to companies with at least 1,000 employees in Germany.
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Frequently Asked Questions about the LkSG briefly explained.

Who monitors the LkSG?
Who is affected by the LkSG?
What must companies do?
What is the purpose of the LkSG?
Who is subject to LkSG?

The Federal Office for Economic Affairs and Export Control (BAFA) verifies whether companies comply with the law. Additionally, BAFA verifies corporate reports and investigates submitted complaints. If it identifies omissions or violations, it has the authority to impose fines or exclude companies from public procurement.

The law monitors violations by German companies in supply chains worldwide. For the law to apply to a company, it must have its main management, main branch, administrative headquarters, statutory seat, or a branch in Germany. Additionally, the size of the company plays a crucial role: Companies with 1,000 or more employees are subject to the Supply Chain Due Diligence Act.

Companies must adhere to nine defined due diligence obligations. These include:  

1. Establishing a risk management system Defining internal responsibilities

2. Defining internal responsibilities

3. Conducting regular risk assessments

4. Issuing a fundamental statement

5. Embedding preventive measures (within the company and with suppliers)

6. Taking corrective measures

7. Establishing a complaint Procedure

8. Implementing due diligence obligations in relation to indirect suppliers

9. Documentation and reporting

The Supply Chain Due Diligence Act (LkSG) was introduced to obligate companies to prevent human rights violations and environmental impacts along their supply chains. It aims to promote responsible corporate practices and protect labor and environmental standards globally. An example is the requirement for companies to take measures to ensure that child labor is not present in their supply chains.

The Supply Chain Act (LkSG) in Germany applies to companies based in Germany or those whose business activities have significant connections to the German market. Initially, the law primarily targeted larger German companies with more than 3,000 employees. In 2024, the law was expanded to include companies with 1,000 or more employees. It applies to all industries and covers the entire supply chain of the company, including direct and indirect suppliers. The law mandates companies to prevent and address human rights violations and environmental offenses in their supply chain. Companies must demonstrate compliance with the law and can face fines and other sanctions for violations.

Supply Chain Due Diligence Act (LkSG)


Our solution supports you in systematically meeting all due diligence obligations. The entire process guides you step by step through all commitments, helping you minimize the risk of being penalized or even eliminating it entirely. We handle the time-consuming and complex risk analysis completely for you. Additionally, you can document in detail the measures to minimize risks and prevent or mitigate violations of the LkSG, assigning these tasks to responsible individuals.