German Supply Chain Act (LkSG)
According to the German Supply Chain Act (LkSG), entrepreneurs with more than 1000 employees must implement risk management for their own business area and immediate suppliers. "Immediate suppliers" refer to external companies with a direct contractual relationship. For "indirect suppliers," in the chain of subcontractors of directly commissioned external companies, the customer is only required to conduct a case-specific risk analysis "based on substantial knowledge."
With the ESGEVA tool, you can map your risk strategy regarding the supply chain according to LkSG and standardize queries to external companies. It relies on a continuously growing database of experiential values.
"The goal is to improve the protection of fundamental human rights in global supply chains. Environmental concerns are also relevant when they lead to human rights violations or serve the protection of human health."
- BMZ (Federal Ministry for Economic Cooperation and Development):
Questions and Answers on the German Supply Chain Due Diligence Act (LkSG), effective from January 1st, 2023
Under the modeling, ESGEVA represents the risk strategy for your business area. A crucial component is your supply chain matrix, which is focused, structured, and visualized.
The annual Supply Chain Act (LkSG) process can be represented using the ESGEVA tool:
A prerequisite for modeling is the company's supply chain matrix.
The influencing factors are the "protected legal positions" according to §2 LkSG.
"Immediate suppliers" undergo an external company evaluation.
Evaluation of situations with "indirect suppliers" only occurs "based on substantial knowledge."
Under risk treatment, "prevention measures" according to §6 and "remedial measures" according to §7 are documented.
An annual effectiveness control is conducted over the influencing factors of your own business area and "immediate suppliers."
The annual BaFa report (BaFa: Federal Office for Economic Affairs and Export Control) describes the methodology, key figures, and results.
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