German Supply Chain Act (LkSG) 2026: what applies in the interim until the CSDDD arrives

What is the LkSG?

The LkSG (Lieferkettensorgfaltspflichtengesetz) is the German Supply Chain Due Diligence Act. Since 1 January 2023 it has required large companies in Germany to identify, prevent and remedy human rights and environmental risks in their own operations and at their suppliers. Since 1 January 2024 it applies to companies with 1,000 or more employees. The Federal Office for Economic Affairs and Export Control (BAFA) supervises compliance.

Since 2025 the law is being rolled back: on 3 September 2025 the federal government decided to scrap the reporting duty retroactively and to reduce the number of fine provisions from 13 to 4. The amending act had its first reading in the Bundestag on 14 January 2026 and was referred to the Committee on Labour and Social Affairs. According to our research (as of 7 September 2026), it has not yet been passed. BAFA already adjusted its enforcement on 1 October 2025 and now only pursues severe violations.

In short: the LkSG still applies, in reduced form. And your corporate customers keep asking.

Who is affected?

• Directly: companies with their head office, principal place of business, administrative seat, registered office or branch in Germany and at least 1,000 employees in Germany (temporary agency workers deployed for more than six months count). That is an estimated 5,000 or so companies.
• Indirectly: all suppliers of these companies. The law requires the large companies to set out their expectations towards suppliers by contract, carry out checks and demand remediation in case of violations. That is why companies with 50 employees also receive codes of conduct, self-assessments and audit requests.

Not affected: companies below 1,000 employees in Germany, unless they supply affected companies. And even as a supplier you have no legal obligation towards BAFA, only a contractual one towards your customer.

What applies from when?

Which concrete obligations arise?

For directly obliged companies, the due diligence obligations of sections 3 to 10 LkSG continue to apply:

1. Set up risk management and appoint a responsible person (human rights officer).
2. Risk analysis annually and on an ad hoc basis, in your own operations and at direct suppliers.
3. Policy statement on the human rights strategy.
4. Preventive measures in your own operations and towards direct suppliers: contractual assurances, training, controls.
5. Remedial measures where violations are identified.
6. Complaints procedure accessible also to employees of suppliers.
7. Documentation of compliance, retained for seven years.
8. Reporting duty (section 10(2)): formally still in the law, in practice suspended; BAFA reviews no reports and demands no late submissions.

For suppliers, this results in the familiar requests: sign the code of conduct, complete the self-assessment, deliver certificates, grant audit rights, publicise the grievance channel.

Common misconceptions

• Ignoring customer requests because “the LkSG is gone”. Your customers’ due diligence obligations continue, and so do their purchasing contracts. Not responding risks your supplier approval.
• Hoping for the CSDDD’s 5,000 threshold. It only applies after transposition, at the earliest from 2028. Until then it stays at 1,000 employees in Germany.
• Still producing the report at great expense. Directly obliged companies should maintain the documentation but no longer produce a report for BAFA. The resources belong in risk analysis and supplier communication.
• Confusing the LkSG with the Forced Labour Regulation. The LkSG has a size threshold and a management system. The EU Forced Labour Regulation from 14 December 2027 has neither; it bans the product.

How SCRM Guard helps

On the platform you run risk analysis, supplier assessments, preventive measures and complaint cases in one system, with owners, deadlines and audit trail. As a supplier you answer customer questionnaires from existing data instead of collecting anew each time. Event monitoring delivers the ad hoc indications the law requires for the risk analysis.

In the full service we take over the risk analysis, supplier communication and documentation and keep you informed about what the amending act and the CSDDD transposition actually change. And we tell you which parts of the LkSG you no longer need to serve.

Sources

• Lieferkettensorgfaltspflichtengesetz (LkSG), gesetze-im-internet.de (German) (16 Jul 2021)
• German Bundestag: first reading of the LkSG amending act (German) (14 Jan 2026)
• BAFA: Supply Chain Act overview (current enforcement, German) (07 Sept 2026)

This page is an editorial briefing for procurement and compliance teams in mid-sized companies, not legal advice. We check deadlines and thresholds against primary sources; the review date is shown at the top of the page.