THE GERMAN SUPPLY CHAIN DUE DILIGENCE ACT(L K SG): AT A GLANCE Aspect Scope Due Diligence Obligations LkSG(Germany) - Applies to companies operating in Germany. - Initially for companies with>3,000 employees, expanding to>1,000 employees in 2024. - Covers entire supply chain, including direct and indirect suppliers. - Requires regular risk analysis for human rights and environmental risks. - Must implement preventive measures and corrective actions for identified risks. - Requires establishing grievance mechanisms for reporting violations. - Companies must report publicly on due diligence efforts annually. Legal and Financial Consequences - Fines up to 2% of global annual turnover for non-compliance. - Non-compliance may result in exclusion from public contracts in Germany. - Focuses on German jurisdiction but has extraterritorial effects. Labour, Environmental and Climate Focus - International Labour Standards, Environmental due diligence included, primarily focused on human rights impact. Stakeholder Involvement - Involves grievance mechanisms and preventive measures. Jurisdiction and Reach - Focuses on companies in Germany but impacts global supply chains. https://www.bafa.de/EN/Supply_Chain_Act/Overview/overview_node.html