Are you prepared for the new supply chain due diligence requirements?
Since January 01, 2023, new due diligence requirements apply to prevent human rights violations in supply chains and to protect the environment. The aim of the legislation is for responsible companies to identify human rights and environmental risks in their own business operations and take measures to reduce or, where possible, prevent them in the future. This applies to companies with their head office, principal place of business, administrative headquarters, registered office or branch office in Germany, as well as to
- from 2023 with at least 3,000 employees
- from 2024, companies with as few as 1,000 employeesf
Duties include:
- Adoption of a policy statement
- Implementation of risk management
- Taking preventive measures
- Establishment of an appropriate complaints procedure
- Documentation and reporting requirements
In particular, a risk analysis must be carried out regularly, but at least once a year. If necessary, appropriate corrective and preventive measures must be derived from this, prioritized and implemented. The results must be compiled in a report to the responsible control authority, the Federal Office of Economics and Export Control (BAFA).
On December 14, 2023, the European Parliament and the EU member states agreed on a directive for a Europe-wide supply chain law. The EU directive aims to implement very similar due diligence obligations to the German LkSG, but the due diligence obligations from the EU directive will be much more far-reaching and will include, for example, the compatibility of business activities with the Paris Climate Agreement. In principle, the rules will apply to companies with more than 500 employees and a turnover of at least 150 million. For companies operating in sectors with a high potential for damage, the rules will apply from 250 employees and a turnover of at least 40 million.
How can tec4U-Solutions support you?
Implementation of the LkSG requires time, money, personnel and know-how. tec4U’s many years of experience in the areas of material compliance and sustainable product design guarantee that you will successfully secure your supply chain supply chain obligations. We help you implement the LkSG in a legally secure manner, fulfill your obligations and reduce potential risks.
LkSG module in DataCross
Within the established material compliance software DataCross, we offer a supply chain module that automates data procurement from suppliers to the greatest possible extent and enables risk analysis to be carried out in compliance with specifications.
The abstract risk analysis of each supplier consists of the assignment of a country and industry index for the 13 risk fields of the LkSG. From this, a cumulative index and a risk status are calculated separately for each risk field. In addition, you can evaluate all suppliers by means of a questionnaire. The results are weighted and combined with the cumulative index values to form a total congestion per risk field. The weighting of the questionnaire to the index values is done via a trustworthiness assessment of the supplier with questions on CSR, sustainability and compliance.
The result flows into the risk management process and is the basis for the concrete risk analysis, for the identification of preventive as well as remedial measures, and for ongoing documentation and reporting.
LkSG software DataCross
- The structure, calculation methods and the questionnaire have been developed in close consultation with the lawyer who also advises BAFA on the creation of the handouts.
- The abstract risk analysis and the adequacy assessment are carried out completely automatically as soon as the supplier master data is loaded into DataCross.
- The following values and indices can be customized by any OEM user and used for calculations:
- Country and industry indices
- Values for the adequacy assessment: causes, intensity and reversibility for all 13 risk folders and experience
- Questionnaire with assessment
- Proposed measures
- The adequacy assessment in DataCross fully covers the requirements of the corresponding BAFA guidelines and consists of all the criteria listed therein: Effectiveness, type and scope of business activity, capacity to influence, contribution to causation and violation. The calculation is fully automated.
- All indices used have been legally checked and their origin, reason for selection and alternatives are transparently documented.
- The creation and tracking of measures is intuitive and convenient
- The system supports the creation of the BAFA report and has a dedicated reporting system for all issues relating to human rights.
LkSG Consulting and Services
In addition to consulting on the implementation of the LkSG in your company in accordance with requirements, tec4U-Solutions supports you in the creation of the necessary documents and operationally with the takeover of supplier communication.
tec4U-Solutions offers the following services on the subject of supply chain management obligations:
- Process integration
- Creation of a compliance specification
- Status and risk analyses
- Data research & validation
- Interface configuration
- Trainings & Workshops
With tec4U-Solutions you receive a legally compliant as well as functionally simple and economical solution for implementing the requirements of the LkSG!
Any questions?
We are looking forward to your contact.
Stefan Nieser
We look forward to supporting you.