Supply Chain Due Diligence Act (Germany)

The Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtgesetz, LkSG) requires large German companies to protect human rights and environmental standards in their global supply chains.

What the law requires:

• Risk analysis: where in the supply chain are human rights violations a risk?
• Preventive measures: training, audits, contractual assurances
• Complaints mechanism: those affected must be able to complain
• Reporting obligation: annual public report

Since when?

• 2023: companies with 3,000 or more employees
• 2024: companies with 1,000 or more employees
• EU directive (planned): even more comprehensive, incl. SMEs

What it means for consumers: products should become more ethical. If a T-shirt at H&M costs €5, H&M has to make sure there's no child labour behind it.