German Supply Chain Act (LkSG) Compliance Software¶
If you've got 1,000+ employees in Germany, the LkSG already applies to you — and BAFA isn't messing around. Fines can hit €8 million or 2% of annual turnover, and the seven due diligence obligations (§4–§10) cover everything from risk analysis to complaints procedures to annual BAFA reporting.
Here's the thing: LkSG compliance isn't a one-time project. It's an annual cycle of risk analysis, preventive measures, documentation, and reporting. LkSG compliance software won't replace the human rights expertise you need, but it'll stop you from drowning in paperwork while BAFA asks for your records.
The LkSG Compliance Challenge¶
Who It Applies To¶
| Phase | Effective Date | Threshold |
|---|---|---|
| Phase 1 | January 1, 2023 | 3,000+ employees in Germany |
| Phase 2 | January 1, 2024 | 1,000+ employees in Germany |
Applies to companies with principal place of business, administrative headquarters, statutory seat, or branch office in Germany employing at least 1,000 people. Foreign companies with a German branch meeting the threshold are also in scope.
Key Due Diligence Requirements (§4–§10 LkSG)¶
| Obligation | Section | What It Requires |
|---|---|---|
| Risk management system | §4 | Identify and prioritise human rights and environmental risks across the business and direct suppliers |
| Policy statement | §6 | Human rights strategy endorsed by management, communicated internally and to partners |
| Risk analysis | §5 | Annual and ad-hoc risk analysis covering own operations, direct and (where substantiated) indirect suppliers |
| Preventive measures | §6 | Procurement strategies, supplier training, contractual assurances proportionate to risks |
| Remedial measures | §7 | Action where violation occurred or is imminent, up to termination of business relationship |
| Complaints procedure | §8 | Accessible internal or industry-wide mechanism for affected persons |
| Documentation and reporting | §10 | Document obligations and submit annual progress reports to BAFA |
What LkSG Compliance Software Automates¶
Risk Analysis & Prioritisation¶
Country-sector heat maps, supplier questionnaire automation with scoring, ongoing monitoring via sanctions lists and NGO reports, and tier-N supply chain mapping.
Policy & Documentation Management¶
Guided policy statement generation (§6), central document repository with version control, automated evidence collection for BAFA audits, and full audit trail.
Complaints & Remediation¶
Whistleblowing portal (§8-compliant), case management with escalation rules, and remediation tracking with outcome documentation.
BAFA Reporting¶
Annual report structure matching BAFA expectations, data aggregation across units and suppliers, and export-ready PDF and structured data formats.
Multi-Framework Synergy¶
CS3D, EUDR, conflict minerals, modern slavery, and forced labour declarations from the same supplier dataset.
Platform Comparison¶
Sustalium — Wizard for LkSG¶
Sustalium provides a Wizard guided questionnaire that walks you step by step through every LkSG obligation. Each question maps directly to a BAFA-required output — risk analysis, policy statement, complaints procedure documentation, or annual report — so you never wonder what regulators expect.
| Feature | Sustalium |
|---|---|
| Approach | Wizard — structured questionnaire guiding through all 7 LkSG obligations |
| Risk analysis | Country-sector heat maps + supplier scoring |
| Policy statement | Guided workflow aligned with §6 LkSG |
| Complaints procedure | Built-in whistleblowing portal |
| BAFA reporting | Pre-configured report structure |
| Multi-framework | CS3D, EUDR, REACH, RoHS, CBAM, GPSR, Modern Slavery |
| Output | Public compliance page + downloadable reports |
| Data ownership | Customer owns all data accuracy and executive sign-off |
| Pricing | €10 per document per month |
Sustalium provides the structured framework and a public output page to share with buyers, auditors, and BAFA. You retain full ownership of your data and are responsible for its accuracy and sign-off. Also covers CS3D, EUDR, Modern Slavery Act, Conflict Minerals, REACH, RoHS, and 100+ other frameworks from the same supplier dataset.
Best for: Companies that need a guided, BAFA-aligned workflow and want to consolidate multiple due diligence frameworks on one platform.
IntegrityNext — Automated Supplier Monitoring¶
AI-powered supplier risk assessment, sustainability ratings and re-assessments, corrective action plan tracking. Pricing: Custom (~€5K–50K/year). Best for: Large enterprises with thousands of suppliers.
Sedex — Self-Assessment & Data Sharing¶
SMETA audit protocol, self-assessment questionnaires, platform data sharing with buyers. Pricing: Membership (~€500–5K+/year per site). Best for: Companies whose buyers require Sedex membership.
Sourcemap — Supply Chain Mapping & Traceability¶
Full tier-N mapping, geospatial risk assessment, deforestation and forced labour risk analysis. Pricing: Custom (~€20K–100K+/year). Best for: Deep supply chain traceability and geospatial analytics.
Feature Comparison¶
| Feature | Sustalium | IntegrityNext | Sedex | Sourcemap |
|---|---|---|---|---|
| Guided LkSG workflow (Wizard) | ✅ | ❌ | ❌ | ❌ |
| Supplier risk analysis | ✅ | ✅ | ❌ | ✅ |
| Policy statement generation | ✅ | ❌ | ❌ | ❌ |
| Complaints procedure portal | ✅ | ❌ | ❌ | ❌ |
| BAFA-aligned reporting | ✅ | ❌ | ❌ | ❌ |
| Tier-N supply chain mapping | ✅ | ✅ | ❌ | ✅ |
| Supplier self-assessment | ✅ | ✅ | ✅ | ❌ |
| Multi-framework (CS3D, EUDR) | ✅ | ❌ | ❌ | ✅ |
| Per-document pricing | ✅ (€10/month) | ❌ | ❌ | ❌ |
| Public compliance page | ✅ | ❌ | ❌ | ❌ |
| Starting price | €10/month | ~€5K/year | ~€500/year | ~€20K/year |
Pricing¶
| Platform | Pricing Model | Starting Range |
|---|---|---|
| Sustalium | Per document per month | €10 per document / month |
| IntegrityNext | Annual subscription | ~€5K–50K/year |
| Sedex | Membership per site | ~€500–5K+/year |
| Sourcemap | Custom enterprise | ~€20K–100K+/year |
Sustalium's per-document pricing means you pay only for compliance documents you actively maintain — whether that is one LkSG declaration or ten. No minimums, no onboarding fees, no long-term commitments.
Frequently Asked Questions¶
What companies does the German Supply Chain Act (LkSG) apply to? Companies with at least 1,000 employees in Germany as of January 1, 2024. Includes foreign companies with a German branch office meeting the threshold.
How does Sustalium help with LkSG compliance? Sustalium's Wizard guided questionnaire takes you through each due diligence obligation step by step. Your answers generate a BAFA-ready compliance document and a public output page for auditors and business partners.
What is the difference between LkSG and CS3D? LkSG applies to 1,000+ employees in Germany. CS3D extends similar obligations EU-wide to 500+ employees. Sustalium covers both frameworks from the same supplier dataset.
Can I use Sustalium for other compliance frameworks? Yes. Sustalium covers CS3D, EUDR, Modern Slavery Act, Conflict Minerals, REACH, RoHS, CBAM, GPSR, and 100+ other frameworks — all sharing the same supplier data.
Does Sustalium provide legal advice or sign-off? No. Sustalium provides the structured framework, guided questionnaire, and public output page. You own your data and are responsible for its accuracy and executive sign-off.
What happens during a BAFA audit? BAFA may request your risk analysis, policy statement, complaints procedure documentation, and annual reports. Sustalium's central repository makes all documents auditable and exportable on demand.