The German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) comes into force from January 1, 2023. This legislation requires companies based in the Federal Republic of Germany with more than 3,000 employees to ensure that human rights are respected and environmental rights are complied with along their supply chains. Failure to adhere to this act will result in substantial fines being imposed. From 2024, the scope of the law will eventually be extended to all companies with more than 1,000 employees. In our experience, these companies in particular are often not sufficiently prepared for the challenges that lie ahead.
Our Sustainability Operations Service offers companies assistance with the operational implementation of the statutory due diligence obligations defined in the LkSG to ensure that they are meeting all requirements. The law leaves plenty of scope for interpretation in this regard. For example, companies are required to establish internal risk management procedures whereby violations of human rights and environmental legislation within the company or by partners in the supply chain must be analyzed. However, there are no concrete guidelines on how risk management procedures can be implemented in the company from an organizational and technical perspective. This is where MHP is able to put its expertise to use and, together with its partners, develop suitable cross-departmental structures and processes. The starting point for targeted support is the readiness check that we have developed, which we use to evaluate how well prepared the company is to conform with the stipulations of LkSG.
In our MHPDeepDive “LkSG – What Does the Law Mean for My Supply Chain?,” we discuss the consequences of LkSG for companies. We will look at the question “How can I ensure I am compliant with LkSG in good time if I am not as prepared as I should be at this stage?” and above all talk about how companies can comply with the new requirements imposed by LkSG. Finally, we take a brief look into the future to see what further challenges we could face in the foreseeable future and how the LkSG can act as a trigger to adopt more mature risk management processes.
TOPICS AT A GLANCE
Here’s what to expect in our MHPDeepDive:
- We will show you the consequences of the LkSG for you and your supply chain.
- You will learn how you can operationally implement the statutory requirements in your company.
- We take a brief look into the future at upcoming trends and other legislation.
- Nicola Noll
Management Consultant Operations, Performance & Strategy at MHP
- Bastian Kempe
Associated Partner Digital Supply Chain Solutions at MHP
- Timo Haug
Partner Operations Excellence at MHP
- Stefan Beck
Senior Manager Big Data & IoT Technologies at MHP