Current Status — A Law in Transition
The LkSG is currently in a significant transitional phase ahead of the EU Corporate Sustainability Due Diligence Directive (CSDDD), which Germany must transpose into national law by July 2028. Since autumn 2025, BAFA has been instructed to pursue enforcement only in cases of serious violations — specifically where companies have failed to take timely preventive or remedial measures or have not established an effective grievance mechanism. The annual reporting obligation has been effectively suspended: BAFA's reporting portal was deactivated in November 2025, and a government draft law proposes its retroactive abolition from 1 January 2023 onwards.
Crucially, however, the underlying due diligence obligations and the documentation requirement remain fully in force. Companies must continue to conduct risk analyses, implement appropriate measures, and maintain internal records for at least seven years — they simply no longer need to file an annual report with BAFA.
The German government has committed to replacing the LkSG with a new law implementing the CSDDD. However, the CSDDD's scope — companies with more than 5,000 employees and more than €1.5 billion in worldwide turnover — is significantly narrower than the LkSG's current 1,000-employee threshold. Many companies presently subject to the LkSG will not fall within the CSDDD's direct scope when it comes into force in 2029.
The Question Your Customer Will Ask
The LkSG does not oblige your customer to fix every risk in the supply chain. It obliges them to identify, assess, and document those risks — and to take proportionate action where risks are found. This means that what your customer needs from you is not a guarantee of perfection, but credible, verifiable evidence of low risk.
In practice, this translates into a very specific question your customer will ask, explicitly or through a supplier questionnaire:
What tangible proof do you have that your products, raw materials, and production processes do not involve human rights violations or significant environmental harm — and how can you demonstrate this?
The answer to this question is not a signed declaration. It is documentation.
Two Examples Where This Becomes Concrete
The timber importer. A company importing timber or wood products from outside the EU may consider itself "just an importer" — buying from established suppliers, passing goods on, not manufacturing anything. But a retail customer subject to the LkSG needs to document the risk status of that timber. Where was it harvested? Under what labour conditions? Is there evidence of legal logging? Does the importer have supply chain documentation going back to the forest of origin, or at least to the sawmill or processing facility? In the absence of this, the importer becomes a risk in the customer's own documentation — and risks losing the contract, or being asked to provide documentation they do not currently have.