Germany's LkSG and Digital Product Passports

Germany's Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz - LkSG) creates requirements that overlap with and complement EU DPP regulations.

What is LkSG?

The German Supply Chain Act requires companies to:

• Identify human rights risks in their supply chains
• Implement preventive measures
• Provide remedy mechanisms
• Report annually on due diligence

Who Must Comply?

Currently (Since 2024)

Companies with:

• Headquarters or branch in Germany
• 1,000+ employees in Germany

Coverage

• Direct suppliers (full due diligence)
• Indirect suppliers (risk-based approach)

LkSG Requirements

Risk Analysis

• Identify risks in own operations
• Assess direct supplier risks
• Investigate indirect suppliers when warranted

Prevention Measures

• Establish risk management system
• Develop policies and procedures
• Train employees and suppliers
• Contractual assurances

Remediation

• Establish grievance mechanism
• Take corrective action when issues found
• Provide remedy to affected parties

Reporting

• Annual public report
• Submit to federal agency (BAFA)
• Document all due diligence activities

Connection to DPP

LkSG and DPP share common needs:

LkSG Requirement	DPP Overlap
Supplier mapping	Supply chain traceability
Risk documentation	Data collection infrastructure
Origin information	Material sourcing data
Audit trails	Verification records

Synergies and Efficiencies

Shared Data Collection

Collect once, use for both:

• Supplier identification
• Country of origin
• Working conditions documentation
• Certifications (SA8000, etc.)

Unified Systems

One platform can serve both:

• Supplier management
• Document collection
• Risk flagging
• Reporting

Cost Savings

Companies report 30-40% cost savings when addressing LkSG and DPP together.

Practical Implementation

Step 1: Map Overlap

Identify which suppliers and data points are relevant to both LkSG and DPP.

Step 2: Unified Data Collection

Design data collection that captures:

• DPP material information
• LkSG human rights indicators
• Environmental data
• Certifications

Step 3: Integrated Risk Assessment

Evaluate suppliers for both:

• DPP compliance capability
• Human rights and environmental risks

Step 4: Combined Reporting

Use common data for:

• LkSG annual report
• DPP disclosures
• ESG reporting

Beyond Germany: EU CSDDD

The EU Corporate Sustainability Due Diligence Directive (CSDDD) extends similar requirements across the EU:

• Similar scope to LkSG
• Broader environmental requirements
• Applicable to more companies
• Expected implementation: 2026-2027

LkSG + DPP Checklist

For German companies (or suppliers to German companies):

• Identify LkSG-relevant suppliers
• Map to DPP product supply chains
• Collect combined data set
• Document human rights due diligence
• Prepare LkSG report
• Build DPP data infrastructure
• Establish grievance mechanism
• Train relevant personnel

lnk.eco for German Companies

Our Supply Chain tier supports both requirements:

• Supplier mapping and management
• Combined data collection
• Documentation and audit trails
• Integration with reporting

---

Address LkSG and DPP together with lnk.eco.