The Act
Since January 2023, the "Act on Corporate Due Diligence to Prevent Human Rights Violations in Supply Chains" (in short: Supply Chain Act) has been in force in Germany. It requires companies to analyze the risks for human rights and environmental protection violations in their supply chains, to take measures to reduce the risks and to report on this.
The Supply Chain Due Diligence Act (LkSG) defines nine due diligence obligations:*
- Establishing a risk management system (§4 Section 1)
- Designating a responsible person or persons within the enterprise (§4 Section 3)
- Performing regular risk analyses (§ 5)
- Issuing a policy statement (§6 Section 2)
- Laying down preventive measures in its own area of business and vis-à-vis direct suppliers
- Taking remedial action (§7 Section 1-3)
- Establishing a complaints procedure (§ 8)
- Implementing due diligence obligations with regard to risks at indirect suppliers (§9)
- Documenting and reporting (§10 Section 1-2)
Violations of the due diligence and reporting obligations defined in the act can result in heavy fines.
* With msg.LieSA we primarily address highlighted due diligence obligations
The challenge
The complexity of supply chains has grown steadily in recent years. Regardless whether logistics, trade or production – companies often have more than 1,000 suppliers. To comply with the act, they need comprehensive knowledge of their supplier base and the associated risk to environmental protection and human rights.
Do you have any questions?
"Procurement is constantly facing new regulatory challenges on ESG issues that need to be met. This can only be achieved with intelligent software solutions."
Our solution: LieSA
To support you in fulfilling your due diligence obligations, we have developed LieSA (LieferkettenSorgfaltspflichtenApplikation) (supply chain due diligence obligations application). LieSA is a solution approach that picks you up where you and your company currently are.
IT solutions can create the greatest added value in the areas of risk management and analysis as well as documentation and reporting. This is why msg.LieSA focuses on precisely these areas.
msg.LieSA …
is ready to go quickly
The implementation effort is low. The first step is to use generally available data and indexes. Based on location and product information, an initial risk assessment of your suppliers is quickly available.
documents
All efforts and activities to detect and reduce or eliminate risks are stored in full. This way, you meet the legal documentation obligation without any addition effort.
is communicative
Data can be retrieved from and imported back into various systems, as required. msg.LieSA therefore fits seamlessly into your IT landscape and works together with supplier management systems, for example.
is individual
You can define the weighting of the criteria, on which the risk analysis is based, specifically for your company depending on corporate values and governance.
remembers
All data is historicized. This applies not only to activities that your company undertakes but also to supplier movements. This allows you to track how the risk of your supplier base changes over time.
is modern and future-proof
We know which requirements there are for a future-proof IT landscape. This is why we have designed msg.LieSA as a cloud solution. It thus offers all the advantages of a modern, cloud-based application.
is (artificially) intelligent
msg.LieSA includes an AI component that identifies products with a risk of child or forced labor. It also takes into account different designations and related products.
is transparent
Our pricing model is transparent and scalable. There are no additional hidden extra costs for the provision of standard functionalities. If you require customized enhancements, we will be happy to provide your with a transparent offer.
Your benefits:
To implement the transparency and reporting obligations, we implement the requirements of the Supply Chain Act with a scalable and configurable solution. This solution is adapted to your needs and designed in more detail depending on
- the data situation in your company
- the integration into your supplier and risk management system
- the additional added value for your company
- your budget.
With this approach, you are also well prepared for the planned EU directive on sustainability in supply chains.
