On August 29, 2025, the German Government started the legislative process for an amendment to the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG). Pursuant to the draft proposal, the reporting obligation, requiring a covered company to file and publish an annual report on how it complies with the LkSG, will be abolished. The LkSG's obligation to perform due diligence of supply chains and to document such efforts remains unaffected. However, the draft suggests limiting the number of omissions for which the responsible regulator may impose a fine.
These changes are supposed to apply as of January 1, 2023 (the date the LkSG became effective) with retroactive effect. The regulator responsible for the enforcement of the LkSG has not yet imposed any fines for violations (the LkSG does not provide for civil liability).
The German Federal Government is expected to formally adopt the draft on September 3, 2025. The proposal will then be submitted to the German Parliament.
Any changes to the LkSG will be short-lived. The LkSG will be replaced by a new statute in light of the EU's Corporate Sustainability Due Diligence Directive (CSDDD). As previously reported, the European institutions are in the process of finalizing the legislative process of this centerpiece of European ESG legislation.
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