German Supply Chain Due Diligence Act

Modular & tailored roadmap

Corporate responsibility does not end at the company’s own factory gates. With the Supply Chain Due Diligence Act (Lieferkettensorgfaltsplfichtengesetz – LkSG), the German government has created an instrument to constantly monitor social, environmental and legal standards in its own global supply chain as well and to initiate measures if necessary. In addition, the EU is also planning its own standard (Directive on corporate sustainability due diligence – CSDD) which will cover even more far-reaching responsibilities and issues. DFGE helps with a modular and pragmatic approach to both enter the topic and improve existing systems.

Strengthening human rights along the value chain

  • Applies from 2023 for companies with more than 3000 employees, from 2024 for companies with more than 1000 employees
  • Due diligence obligations of companies will be extended to their entire supply chain
  • Companies must take action if there are clear indications of human rights violations

Identifying and analyzing risks

Impact of activities on human rights +
Analysis, assessment, prioritization of relevant risk areas +.
No separate assessment of environmental protection

Take action

Prevent, minimize and remedy negative effects

Check effectiveness

Control of the measures

Establishment of a complaints mechanism

Internal or external

Transparent and public reporting

On a yearly basis

What does this mean for companies?

Internal & External

Implementation in the own business unit and at the direct supplier:

  • Adopt policy statement on respect for human rights.
  • Risk analysis: Perform procedures to identify adverse impacts on human rights.
  • Risk management (including prevention and mitigation measures) to avert potential adverse impacts on human rights.
  • Establish grievance mechanism.
  • Transparent public reporting

Implementation at the indirect supplier:

  • Only occasion-related due diligence obligations and only if the company becomes aware of a possible violation. Then the company must:
    • Conduct a risk analysis
    • Implement a concept for minimization and prevention
    • Implement preventive measures

How can DFGE help?

DFGE helps you to create a modular & tailored roadmap

LkSG Performance Check

Where does your company stand today? What measures have you already implemented? Where are the links between your business activities and human rights? Which regulations and standards are relevant for you? What level of ambition does your company want to achieve?

Materiality, Benchmark & Action Areas

On which topics should the focus be set – where are the biggest impacts and dependencies for your company? What can you learn from best practice companies? In which areas do your measures have the greatest impact?

Policy, Governance & Roadmap

What needs to be addressed in the policy? How can the LkSG strategy be integrated into your organization? What are the next steps for your company?
Lieferkettensorgfaltsplfichtengesetz

Your Advantages

Why DFGE on the topic of LkSG Strategy?

  • Structured approach to identify the focus topics for you step-by-step
  • Many years of experience in sustainability reporting according to internationally recognized standards and guidelines such as CSRD, SFRD und GRI
  • Many years of expertise in supply chain, supply chain law and EU directives
  • Experts in ESG-Strategie & Governance
  • Help with questions on application, scope and issues such as liability
  • As an official GRI partner, we help you to understand the innovations of the LkSG and to decide which reporting standard is best suited for your company

Start with your LkSG Strategy

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