The law, the so-called "Supply Chain Due Diligence Act" (LkSG), was passed in the German Bundestag on June 14th, 2021 and affects international companies that have 3,000 employees or more (from January 1st, 2023) or 1,000 employees or more (from January 1st, 2024). It should be noted that an EU-wide supply chain law that will come into force in 2024 is already in the works and will provide for significantly stricter application requirements.
The aim of the law is to ensure that human rights are observed within the supply chain and to prevent environmental damage during the production, storage and transport of goods. In the event of non-compliance, there is a risk of a fine of up to 500,000 euros or for companiens having 400 million euros annual turnover or above up to 2% of their turnover.
Fines and introductory costs are high. It is therefore alarming that by the end of 2022, according to the Emarticon® Supply Management Survey, only approx. 35% of the German companies concerned had introduced appropriate measures!
What are the success factors?