What is the LkSG?  📰

Due diligence in the supply chain. An introduction.  

When?

• The LkSG will come into force from 01.01.2023 for companies with more than 3,000 employees.
• From 01.01.2024 also for companies with more than 1,000 employees.

Why? 

The Law wants to promote the protection of human rights and environment-related risks

• Key focus is on the 1. identification, 2, improvement, and 3. prevention of the occurrence of human rights abuses and environmental risks in the supply chain through the introduction of mandatory due diligence requirements

What? 

Companies must take specific measures in order to meet the obligations of the LkSG. It is an ongoing process with different important steps. The primary focus is on:

• establishing an effective internal risk management protocol, and 
• identifying existing and potential risks with the aim of ending or minimizing/mitigating them.

How?  

Pursuing a risk-based approach.

Mandatory:

• Define & implement a policy statement and human rights strategy
• Establishment of a risk management system
• Internal and external reporting
• Establishment of a complaints procedure

Dependent on risk occurrence:

• Certificate control and request
• Auditing
• Training of risk suppliers
• Supply chain exploration - transparency in the supply chain

📋The retraced 5 Key Steps for Risk Management  
1. Identify → 2. Assess → 3. Set priorities → 4. Take action → 5. Report

Learn more about the law and how retraced can help in the comprehensive guidebook below