What is The German Supply Chain Due Diligence Act?

The new German Supply Chain Due Diligence Act (LkSG) is a landmark piece of legislation that aims to improve human rights and environmental protection in global supply chains. The law, which came into force on January 1, 2023, applies to companies with 3,000 or more employees with their head office, principal place of business, or administrative headquarters in Germany. From 2024, the law will also apply to companies with 1,000 or more employees.

The LkSG requires companies to conduct human rights and environmental due diligence throughout their supply chains. This includes identifying and assessing risks, taking steps to mitigate those risks, and monitoring their performance. Companies must also report on their due diligence efforts to the public.

The LkSG is expected to impact businesses, workers, and the environment significantly. The law will require businesses to invest in new systems and procedures to comply with the due diligence requirements. This could lead to increased costs for businesses, but it could also lead to improved efficiency and risk management.

For workers, the LkSG could help improve health and safety conditions, wages, and working hours. The law could also help to prevent forced labour and child labour.

For the environment, the LkSG could help to reduce pollution and protect natural resources. The law could also promote sustainable production and consumption practices.

The LkSG is a significant step forward in the fight for human rights and environmental protection in global supply chains. The law is expected to positively impact businesses, workers, and the environment.

Here are some specific examples of how the LkSG could impact businesses, workers, and the environment:

• Businesses: Companies could face increased costs for compliance with the LkSG, such as implementing new systems and procedures, conducting due diligence assessments, and monitoring their performance. However, the law could also lead to improved efficiency and risk management for businesses and increased brand reputation and customer loyalty.
• Workers: The LkSG could help improve workers’ health and safety conditions, wages, and working hours. The law could also help to prevent forced labour and child labour. This could lead to improved productivity and morale for workers and reduced turnover and absenteeism.
• Environment: The LkSG could help to reduce pollution and protect natural resources. The law could also help to promote sustainable production and consumption practices. This could lead to improved air and water quality, as well as reduced greenhouse gas emissions.

Overall, the LkSG is a positive development for businesses, workers, and the environment. The law is expected to impact global supply chains significantly, and it could help make them sustainable and ethical.