[Disclaimer] This article is reconstructed based on information from external sources. Please verify the original source before referring to this content.
News Summary
The following content was published online. A translated summary is presented below. See the source for details.
In September 2025, the German Federal Cabinet approved amendments to the Supply Chain Due Diligence Act (LkSG), eliminating reporting obligations retroactively to January 1, 2023. This decision, part of broader efforts to reduce bureaucratic burdens on businesses, comes under the new government led by Chancellor Friedrich Merz. The changes aim to streamline compliance requirements while maintaining core due diligence obligations. Companies are no longer required to submit or publish annual reports on their due diligence compliance for 2023 and 2024. However, substantive due diligence and documentation obligations remain in place. This move is seen as a temporary measure until the EU Corporate Sustainability Due Diligence Directive (CSDDD) is transposed into national law by July 26, 2027. The German Federal Office for Economic Affairs and Export Control (BAFA) had already suspended enforcement of the reporting requirement in 2024 and will only start checking reports from January 1, 2026, with a grace period until December 31, 2025.
Source: Bundesregierung (Germany)
Our Commentary
Background and Context
The Supply Chain Due Diligence Act (Lieferkettengesetz or LkSG) was originally implemented to ensure corporate responsibility in global supply chains. However, the new German government under Chancellor Friedrich Merz, who took office in May 2025, has prioritized reducing bureaucratic burdens on businesses. This shift in policy is part of a broader trend in Germany to streamline regulations and improve the business environment.
Expert Analysis
The elimination of reporting obligations represents a significant change in Germany’s approach to supply chain due diligence. While it reduces administrative burdens, it also raises questions about maintaining transparency and accountability in corporate practices.
Key points:
- The core due diligence obligations remain in place, suggesting a focus on substance over form.
- This change aligns with the EU’s broader efforts to harmonize sustainability reporting across member states.
- The temporary nature of these changes indicates a transitional period as Germany adapts to upcoming EU directives.
Additional Data and Fact Reinforcement
Recent developments in supply chain management regulations include:
- The U.S. has introduced legislation for a Supply Chain Resiliency and Crisis Response Program.
- The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) is set to be implemented by 2027.
- Germany’s Fourth Bureaucracy Reduction Act (BEG IV) came into effect on January 1, 2025, focusing on digitalization and simplification.
Related News
These changes to the LkSG coincide with global efforts to balance corporate responsibility with economic efficiency. The U.S. SEC’s advancement of mandatory climate disclosures and similar transparency rules emerging in Canada and Australia reflect a worldwide trend towards legally binding ESG compliance across global supply chains.
Summary
The amendments to Germany’s Supply Chain Act represent a significant shift in regulatory approach, balancing corporate responsibility with the need for reduced bureaucracy. As global supply chain regulations continue to evolve, companies must remain vigilant in maintaining ethical practices while adapting to changing reporting requirements.
