Germany's Supply Chain Due Diligence Act (LkSG)
ENFORCEMENT TIMELINE
Effective January 1, 2024 (applicable to companies with 1,000 or more employees)
Overview
This German national law requires companies to establish a risk management system, publish annual reports, and set up a grievance mechanism to prevent and remedy human rights violations, such as child and forced labour, and environmental risks, such as mercury pollution or breaches of the Stockholm Convention on POPs, both within their own operations and among their direct and indirect suppliers.
With the CSDDD's scope significantly narrowed by the Omnibus I reform (in force since March 2026), LkSG is no longer best understood as a law being "absorbed and scaled back" into CSDDD. Instead, it is expected to remain an important standalone law in Germany with a broad practical reach, continuing to impose human rights and environmental due diligence obligations on mid-sized companies that now fall outside the CSDDD's scope.
Enforcement Timeline
June 2021: The law is passed by the Bundestag.
January 1, 2023: The law takes effect for companies with 3,000 or more employees in Germany.
January 1, 2024: The scope expands to companies with 1,000 or more employees.
18 March 2026: The EU CSDDD Omnibus I reform enters into force, reducing the number of companies within CSDDD scope. As a result, more companies remain subject to LkSG alone rather than the CSDDD. Member States are permitted to adjust the scope of their own national laws (including LkSG) in line with the CSDDD's narrower new scope.
Business Impact
Japanese companies that are suppliers to large German corporations are routinely asked to respond to due diligence questionnaires and provide risk assessment data.