The supply chain due diligence act
Millions of people worldwide live in poverty because there are no minimum social standards. This includes 79 million children who work under exploitative conditions, for example in textile factories, mines or in agriculture. The Supply Chain Due Diligence Act (LkSG), also known as the Supply Chain Act, is intended to remedy this.
What is the Supply Chain Act (LkSG)?
The aim of the law, which is in effect in Germany as of January 1, 2023, is to improve the protection of human rights and the environment in global supply chains. It is based on internationally recognized codes of conduct and prohibitions. In particular, it concerns companies adhering to fundamental human rights standards. These include the prohibition of child labor and forced labor. The Supply Chain Act also covers some key environmental standards, such as the requirement that drinking water must not be contaminated. The law imposes due diligence obligations on companies to ensure that human rights are respected within the company, among contract partners, and suppliers. The most important of these are that companies must establish risk management and a complaints procedure. Measures must also be taken to reduce risks and remedy violations. Once a year, companies must report how they and their business partners prevent human rights violations from occurring or remedy them if they do occur. In addition, they must report whether violations have occurred.
Who is the Supply Chain Act for?
The obligations arising from the law apply to companies that have their head office, main branch, administrative headquarters, statutory seat, or branch office in Germany and typically employ at least 1,000 workers domestically.
When does it apply?
The law has been in effect since January 1, 2023, initially for companies with at least 3,000 employees, and from 2024 also for companies with at least 1,000 employees in Germany.
Our software SCORES – master the LkSG with minimal effort
Is your company affected by the LkSG? We have the appropriate software solution
Our solution supports you in complying with all due diligence obligations in a process-supported manner. The entire process guides you step by step through all obligations. This way, you minimize your risk of having to pay fines or penalties or even eliminate it entirely. We take care of the time-consuming and complex risk analysis for you completely. You can also detail measures to minimize risks and prevent or reduce violations of the LkSG and assign these tasks to those responsible. The software documents all results and processes and automatically transfers them into the LkSG report. There is no need for a frantic gathering of all documents at the end of the year. In addition, with our artificial intelligence software for event-related risk analysis, you have the risks in your own business area as well as in the supply chains under control on a daily basis (event-related risk analysis). Full lawyers developed our solution together with experienced sustainability and IT experts. The legal expertise is thus built in – and you can calmly turn to other tasks.