Blog
Supply Chain Due Diligence Act in Mid-Market: Implementation of Minimum Requirements (2/2)
Since 2023, the Supply Chain Due Diligence Act (LkSG) enacted by the German Bundestag has been in effect and imposes significant financial penalties for violations.
The mid-market is also affected through indirect reporting obligations as well as an even more far-reaching EU directive for all companies along the supply chain.
Not only is the name of the LkSG complex, but the precise contents of the law and its implementation are difficult to interpret for many affected mid-market companies.
Discover now in this blog post how you can quickly and easily implement the minimum requirements of the LkSG in your company. Furthermore, in our whitepaper you can learn what obligations the LkSG contains, whether you are affected, and how, with the help of Tacto, you can easily and intuitively monitor the LkSG within your supply chain and comply with the minimum requirements.
Implementation of the LkSG
The LkSG requirements can be divided into internal and external requirements. On the one hand, information must be requested externally from suppliers to verify their careful conduct. On the other hand, you as an organization must ensure certain internal structures for successful compliance with the directive.
Meet External Requirements Through Supplier Self-Disclosures
As a first step, relevant information regarding environmental and occupational safety should be requested from suppliers. This information forms the foundation for successfully establishing risk management and conducting risk analyses. Tailored to the LkSG risk fields, questions can be posed on the following topics:
Environmental Protection
- Manufacture, use, and release of mercury
- Protection against harmful chemicals, organic pollutants, and waste
Human Rights
- Child labor/minimum employment age
- Slavery, forced labor, and discrimination
Occupational Safety and Health
- Compliance with occupational safety laws
- Protective clothing
- First aid
- Safety standards and protective measures
Labor Rights
- Compensation and minimum wage
- Freedom of association
Furthermore, the following certificates can be requested to guarantee the supplier's compliance with due diligence obligations:
- SMETA / Sedex for social responsibility and ethical conduct
- SA 8000 for social responsibility (international)
- ISO 14001 for environmental management systems
- ISO 9001 for quality management systems'
- ISO 50001, 50003 for energy management systems'
- Blue Angel for management of raw materials'
- Verification of the CO2 footprint according to DIN EN ISO 14064-3
This important information forms the foundation for compliance with the following statutory due diligence obligations:
- Documentation and reporting
- Establishment of a risk management system
- Conducting risk analyses
- Implementation of measures toward direct suppliers
- Implementation of due diligence obligations with indirect suppliers
Meet Internal Requirements Through Establishing Organizational Due Diligence Structures
Some of the due diligence obligations also relate to organizational structures and processes that must be established.
These include:
- Assignment of a person or department responsible for implementing the LkSG
- Implementation of preventive measures within the company and the associated rapid implementation of remedial measures
- Issuance of a statement of principle describing measures for operational compliance with due diligence obligations and monitoring of the directive with suppliers. Own measures for occupational and environmental protection should also be documented here
- Establishment of a complaint procedure for the rapid internal and external filing of complaints and their further processing. For example, a form on the website or a dedicated email address can be considered for this purpose
We are happy to support you in implementing the LkSG requirements!
Implementation of the law: The LkSG requirements can be divided into internal and external requirements. On the one hand, information must be requested externally from suppliers to verify their careful conduct. On the other hand, you as an organization must ensure certain internal structures for successful compliance with the law.
