Compliance with German Supply Chain Due Diligence Act
Kumi is a London and Berlin-based company. We are supporting companies and industry schemes to comply with the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG).
The German Supply Chain Due Diligence Act – Lieferkettensorgfaltspflichtengesetz (LkSG) – comes into force in January 2023. The LkSG will have significant ramifications for companies that are based in Germany and fall under the scope of the Act, as well as for companies that are suppliers to German companies impacted by the Act.
Companies needing to achieve LkSG compliance
The LkSG comes into force in January 2023 for companies registered in Germany with over 3,000 employees and expands to companies with over 1,000 employees from January 2024. For purposes calculating the Act’s applicability, employees of subject companies working abroad are included.
The Act’s focus is on protecting human rights and addressing specific environmental risks by requiring companies to establish robust responsible sourcing management systems that effectively identify and manage relevant social and environmental risks in their supply chains.
It is anticipated that the LkSG will have significant ramifications for companies that are suppliers to German companies under the scope of the Act, due to the requirement for companies to take specific actions for identified risks relevant to both their own operations and those of their direct suppliers. This will require, in turn, due diligence actions further down the supply chain where potential risks have been identified, thereby potentially also impacting companies that are indirect suppliers to German companies.
Kumi helps companies to comply with the LkSG
Kumi is a specialist advisor on responsible sourcing, based in London and Berlin and supported by a global network of partners and associates.
Our experience of what it takes to set up and practically implement supply chain due diligence programmes within companies, alongside our extensive work with regulators, policymakers and industry standards, makes us uniquely placed to support companies and schemes needing to understand the practical implications of the LkSG.
We are supporting companies to meet the expectations of the LkSG specifically in the following ways:
- Gap analysis: Assessing existing management systems to identify strengths and gaps in company approaches against the requirements of the LkSG and other relevant responsible sourcing expectations.
- Developing policies and standards: Reviewing existing documents and drafting updated versions to ensure that they meet the requirements of the LkSG and other relevant responsible sourcing expectations.
- Due diligence management systems: Developing management processes and procedures to ensure implementation of the requirements of the LkSG. This can include mapping suppliers and developing risk identification and assessment tools and processes.
- Defining management accountabilities: An important part of building a robust responsible sourcing management system is ensuring that there is sufficient buy-in from senior management and that staff members are given responsibility for undertaking responsible sourcing activities. We help companies to determine roles and responsibilities for relevant staff and fulfil relevant capacity building needs.
- Reporting: Due diligence reports provide transparency and accountability to relevant stakeholders on your efforts towards responsible sourcing. We help companies draft reports that meet good practice expectations.
Get in touch
We believe in building strong and lasting relationships with our clients and pride ourselves in living out our values in the way we work.
We would be delighted to discuss your specific requirements and how we may be able to assist your company meet the requirements of the LkSG. Get in touch with us to find out how we can support you.