If your company - including Group/parent or subsidiaries - operate in Germany, or if you have customers or suppliers in Germany, you will be impacted by the new German Supply Chain Due Diligence Act! The question is, how will it affect you, and do you have the right tools to respond?
Known in German as “LkSG”, this law mandates due diligence on human rights and environmental issues in the supply chain. This paper covers exactly what you need to know, with a summary of the law’s scope and requirements and how it will affect you as a buyer.
It also covers the critical points where the law raises the regulatory stakes compared to previous similar laws, which demands specific and well-proven ESG due diligence expertise and tools. For example:
The law is ambitious in scope : requiring companies over 3000 employees (and over 1000 as of 2024) to perform supply chain due diligence. The law indirectly impacts 100’s of thousands of suppliers to those enterprises not just in Germany but anywhere in the world, as well as in some cases Tier 2, 3 or beyond, who must respond.
It is prescriptive, requiring specific human rights due diligence actions and parameters in risk mapping, assessment, and mitigation, as well as a higher threshold for supplier response. For example, the German government has signaled that supplier self-declarations alone are not a guarantee of compliance.
It has stronger enforcement mechanisms, with stiffer fines for non-compliance.
Also, learn about EcoVadis’ unique solution capabilities that address these challenges. Founded in 2007 and addressing due diligence laws since France’s ‘duty of care’ law in 2017, we are helping 1000+ enterprise procurement, ESG and compliance teams to:
Scan more than a million suppliers for ESG risks
Engage 100,000+ of their suppliers in 175 countries in due diligence actions through reliable, globally-recognized ratings that help them respond efficiently
Leverage scorecards and improvement tools to drive mitigation actions that also create value for - and greater engagement by - suppliers, leading to more enduring compliance.
By collaborating across the EcoVadis Network, buyers and suppliers work together to manage and comply with supply chain ESG due diligence laws, and meet their corporate sustainability goals and commitments, in Germany and around the world.