2026 Snapshot
German Supply Chain Due Diligence Act (LkSG)
In force since January 1, 2023, the LkSG is a cornerstone of corporate accountability in Germany, currently undergoing significant legislative transformations to align with evolving international requirements and the EU CSDDD framework.
Current Status
The act remains in force; however, it is currently facing significant legislative changes as Germany prepares to transition towards a broader European standard.
2026 Update
The German Federal Cabinet has initiated an amendment to replace the LkSG with a "Law on International Corporate Responsibility." This shift is designed to align with the EU CSDDD while reducing bureaucratic overlap and streamlining compliance for multinational enterprises.
Key Requirements
The law applies to companies with at least 1,000 employees in Germany. Entities must implement robust risk management systems to identify, prevent, and mitigate human rights and environmental risks within their own operations and across their entire global supply chain.
Enforcement & Penalties
Non-compliance carries severe consequences. Enforcement mechanisms include penalties that can reach up to €8 million or 2% of total annual global turnover for large-scale firms failing to meet their due diligence obligations.
German Supply Chain Due Diligence Act (LkSG) – 2026 Snapshot
The landscape of corporate responsibility in Germany is shifting as the LkSG moves towards alignment with broader European standards, impacting compliance for major firms.
Current Status
In force since January 1, 2023, but currently facing significant legislative changes as the regulatory environment evolves.
2026 Update
The German Federal Cabinet has initiated an amendment to replace the LkSG with a 'Law on International Corporate Responsibility' to align with the EU CSDDD in a less bureaucratic manner.
Key Requirements
Applies to companies with at least 1,000 employees in Germany, requiring risk management systems to identify and prevent human rights and environmental risks in their own operations and across the entire supply chain.
Enforcement
Penalties for non-compliance can be severe, reaching up to €8 million or 2% of annual global turnover for large firms that fail to meet due diligence standards.