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LkSG and CSDDD in comparison

What is the difference between German and European supply chain law?

Which companies are affected?

LkSG

CSDDD

From 1 January 2023: German companies with more than 3,000 employees

From 1 January 2024: German companies with more than 1,000 employees

European companies with

  1. more than 1,000 employees and
  2. over EUR 450 million net sales

Non-EU companies if they exceed the applicable turnover threshold (EUR 450 million) in the EU internal market.

Different transition periods apply depending on the size of the company:

  1. 3 years (until 2027) for companies with 5,000 or more employees and a minimum turnover of 1.5 billion euros worldwide.
  2. 4 years (until 2028) for companies with 3,000 or more employees and a minimum turnover of 900 million euros
  3. 5 years (until 2029) for companies with 1,000 or more employees and a minimum turnover of 450 million euros
The LkSG therefore applies to around 5,700 companies in Germany.
This means that the CSDDD applies to around 5,450 companies in Europe.

Are the companies concerned liable under civil law?

LkSG

CSDDD

No

Yes

But there is no liability outside your own sphere of influence. Companies are held liable if they have directly caused damage themselves. As is already the case under the German Civil Code.

What obligations do the companies concerned have?

LkSG

CSDDD

Due diligence obligations for human rights and associated environmental risks vis-à-vis direct suppliers and only vis-à-vis other links in the supply chain if we are aware of them.

Comprehensive due diligence obligations for the environment and human rights along the supply chain.

Indirect suppliers and distribution chain including use and disposal of products.

Additional environmental concerns e.g.

  1. Protection of flora and fauna;
  2. Ban on substances that damage the ozone layer;
  3. Protection of cultural heritage;
  4. Minimising the impact on wetlands;
  5. Prevention of pollution caused by waste from ships;

  6. climate target of limiting global warming to 1.5 degrees through CO2 savings.

Actual and potential negative impacts must be identified, reported and - where possible - eliminated or minimised.
Actual and potential negative impacts must be identified, reported and eliminated or minimised.

What sanctions are threatened?

LkSG

CSDDD

Fines of up to EUR 800,000, for companies with a turnover of over EUR 400 million up to 2% of annual turnover. Exclusion from public sector contracts.
Appropriate fines based on worldwide net turnover. Fines of up to 5% of annual turnover as well as the publication of the infringement, naming the company, the submission of a cease-and-desist declaration with regard to similar further infringements and the prohibition of the marketing or export of products and services

Which companies are affected?

LkSG

From 1 January 2023: German companies with more than 3,000 employees

From 1 January 2024: German companies with more than 1,000 employees

The LkSG therefore applies to around 5,700 companies in Germany.

CSDDD

European companies with

  1. more than 1,000 employees and
  2. over EUR 450 million net sales

Non-EU companies if they exceed the applicable turnover threshold (EUR 450 million) in the EU internal market.

Different transition periods apply depending on the size of the company:

  1. 3 years (until 2027) for companies with 5,000 or more employees and a minimum turnover of 1.5 billion euros worldwide.
  2. 4 years (until 2028) for companies with 3,000 or more employees and a minimum turnover of 900 million euros
  3. 5 years (until 2029) for companies with 1,000 or more employees and a minimum turnover of 450 million euros
This means that the CSDDD applies to around 5,450 companies in Europe.

Are the companies concerned liable under civil law?

LkSG

No

CSDDD

Yes

But there is no liability outside your own sphere of influence. Companies are held liable if they have directly caused damage themselves. As is already the case under the German Civil Code.

Welche Pflichten haben die betroffenen Unternehmen?

LkSG

Due diligence obligations for human rights and associated environmental risks vis-à-vis direct suppliers and only vis-à-vis other links in the supply chain if we are aware of them.
Actual and potential negative impacts must be identified, reported and - where possible - eliminated or minimised.

CSDDD

Comprehensive due diligence obligations for the environment and human rights along the supply chain.

Indirect suppliers and distribution chain including use and disposal of products.

Additional environmental concerns e.g.

  1. Protection of flora and fauna;
  2. Ban on substances that damage the ozone layer;
  3. Protection of cultural heritage;
  4. Minimising the impact on wetlands;
  5. Prevention of pollution caused by waste from ships;

  6. climate target of limiting global warming to 1.5 degrees through CO2 savings.

Actual and potential negative impacts must be identified, reported and eliminated or minimised.

Stehen die betroffenen Unternehmen in zivilrechtlicher Haftung?

LkSG

Fines of up to EUR 800,000, for companies with a turnover of over EUR 400 million up to 2% of the annual turnover. Exclusion from public sector contracts.

CSDDD

Appropriate fines based on worldwide net turnover. Fines of up to 5% of annual turnover as well as the publication of the infringement, naming the company, the submission of a cease-and-desist declaration with regard to similar further infringements and the prohibition of the marketing or export of products and services

Download comparison table

You can obtain a PDF with one of the tables via this link. (In german language only)
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