German Supply Chain Due Diligence Act

Modular & tailored roadmap

Corporate responsibility does not end at the factory gate. With the Supply Chain Due Diligence Act (LkSG), the German government has created an instrument to constantly monitor social, environmental and legal standards in its own global supply chain and take action if necessary. The EU is also planning a supply chain law (Corporate Sustainability Due Diligence Directive – CSDDD or CS3D), which will cover even more far-reaching responsibilities and issues. With a modular and pragmatic approach, the DFGE helps both to enter the topic and to improve existing systems.

Strengthening human rights along the value chain

  • Applies since 2023 to companies with more than 3000 employees in Germany, from 2024 to companies with more than 1000 employees in Germany
  • Companies’ due diligence obligations 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:

  • Establish risk management
  • Conduct annual risk analysis to identify human rights and environmental risks
  • Adopt a policy statement on respect for human rights
  • Establish a grievance mechanism.
  • Take preventive and remedial measures to avert potential negative impacts on human rights
  • Transparent public reporting

Implementation at the direct supplier:

  • Conduct annual risk analysis to identify human rights and environmental risks
  • Take preventive and remedial measures to avert potential negative impacts on human rights

Implementation at the indirect supplier:

  • Only event-related due diligence obligations and only if the company becomes aware of a possible violation. Then the company must:
  • Carry out a risk analysis
  • Implement a concept for minimisation and avoidance
  • 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 would your company like to achieve?

Risk analysis workshop

What requirements does the LkSG place on risk analysis? How do you identify high-risk suppliers? How do you carry out an abstract and a concrete risk analysis? Which tools help to carry out the risk analysis?

Materiality, Benchmark & Action Areas

Which topics should be focussed on – where are the greatest effects 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 statement? How can the LkSG strategy be integrated into your organisation? What are the next steps for your organisation?

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 in accordance with internationally recognised standards and guidelines such as CSRD, SFRD and GRI
  • Many years of expertise in the area of supply chain, supply chain law and EU directives
  • Experts in ESG strategy & governance
  • Help with questions about application, scope and issues such as liability

Start with your LkSG Strategy

+49 8192 99 7 33-20