Germany’s new coalition government plans to weaken sustainability due diligence law
Germany’s conservative CDU and CSU parties and the center-left SPD announced a deal for the formation of a new government, and released a coalition agreement that includes the immediate elimination of Germany’s human rights and environmental supply chain due diligence law, the Supply Chain Act (LkSG).
The agreement says that the LkSG will be replaced with the EU’s new Corporate Sustainability Due Diligence Directive (CSDDD), although under the EU’s new Omnibus proposals, the CSDDD will likely only apply in mid-2028, and require less frequent monitoring than the LkSG.
Introduced in 2021, and applying from 2023, the LkSG created a series of sustainability-focused requirements for large Germany-based companies to prevent and mitigate risks of human rights violations and environmental damage in their operations and supply chains.
The law included requirements for companies to perform human rights and environmental risk analysis annually covering their operations and direct suppliers, and for indirect suppliers if there is knowledge of human rights abuses…
… the coalition said that the “reporting requirement under the LkSG will be immediately abolished and completely eliminated,” adding that existing obligations will not be sanctioned until the CSDDD comes into effect, other than for cases of serious human rights violations…