What is the German Due Diligence Act ( LkSG )?
“ having a clear idea of processes , and an understanding of how and when decisions are made within those processes is vital for identifying compliance gaps because it allows procurement teams to chart where the controls are addressed in the process flows ,” explains Lillevik .
So what does this mean for changing European Union ( EU ) regulations such as the German Due Diligence Act ( LkSG )? With only 4 % of German companies prepared to implement the Act and 70 % poorly prepared , Kinghans sees most of GEP ’ s clients increasing their investments in AI-driven software solutions to gain greater visibility and tracking across the
What is the German Due Diligence Act ( LkSG )?
The German Supply Chain Due Diligence Act went into effect on January 1 2023 . It means German companies face fines of up to 2 % of their global turnover if they cannot demonstrate ESG transparency in their supply chain .
It also means non-German firms that supply a large German company , in any sector , will have to provide large amounts of detailed ESG data to their German customers in order to keep doing business with them .
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