Supply Chain Due Diligence Act

What is the Supply Chain Due Diligence Act?

On January 1, 2023, the Supply Chain Act, or LKSG for short, came into force. The aim of this law is to introduce strict regulations for global supply chains with regard to child labor, wage standards and environmental protection. Both the various players within the supply chain, such as companies and consumers, should benefit from this. The duty of care extends to our own business segment as well as to contractual partners and other (indirect) suppliers.

Benefits of the LKSG

Which companies are affected?

The Supply Chain Act will be binding for companies with at least 3,000 employees from January 1, 2023. From 2024, it will already affect companies with at least 1,000 employees. This regulation applies to all companies that have their headquarters, main branch or headquarters in Germany.

What does a company have to consider?

In the future, companies must identify, evaluate and prioritize risks within their supply chains. Based on these results, a so-called policy statement is published and appropriate measures against violations are derived.

Companies' due diligence obligations include:

• Determination of internal company responsibility
• Set up risk management, as well as complaint procedures
• Regular risk analyses
• Submission and publication of policy statement
• Establishing prevention measures
• Take corrective action
• Supply chain management documentation and reporting

How to create transparency in your supply chain

Do you have a lot of data work ahead of you as a result of the Supply Chain Act? inics helps you select innovative technologies and tools to ensure transparency and compliance within the supply chain. In this way, sustainable business practices can be promoted and better decisions can be made.

Further information on the subject of Supply Chain Act is available on the website of Federal Ministry of Labour and Social Affairs.