On this page, you will find information on how to conduct a risk analysis as required by the Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, or LkSG).
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The risk analysis is the basis for appropriate and effective risk management. Companies are required to comply with human rights and environmental due diligence obligations in an appropriate manner. The aim is to prevent human rights or environment-related risks, mitigate them or stop the violation of human rights or environment-related obligations. To do so, the company concerned must identify, weigh and, if necessary, prioritize the human rights and environment-related risks.
Within the framework of appropriate and effective risk management, the LkSG distinguishes between two types of risk analysis: Regular risk analysis and ad hoc risk analysis.
The regular risk analysis must be conducted once per year.
An ad hoc risk analysis can be triggered by substantiated knowledge of a possible violation of a human rights or environmental obligation at one or more indirect suppliers. A company must also conduct an ad hoc risk analysis when it expects a concrete significant change in risks or the emergence of new risks along the entire supply chain due to a change in its business activities.
For your support in implementing a risk analysis, BAFA has published the Guidance Identifying, weighting and prioritizing risks. Further clarifications on the establishment of a risk analysis as well as on the implementation of the risk analysis in terms of the LkSG can also be found in the chapters VII and VIII of the Frequently Asked Questions.
