LkSG policy statement
The policy statement under section 6 (2) of the German Supply Chain Due Diligence Act (LkSG) is the declaration on a company's human rights strategy adopted by senior management, setting out its procedures, priority risks and expectations of staff and suppliers.
The policy statement is a company's public commitment to human rights and environmental due diligence and, at the same time, an explicitly named preventive measure under the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG). Section 6 (2) LkSG requires senior management to adopt a policy statement on the company's human rights strategy. Placing responsibility at board or managing-director level is deliberate: the statement is not a marketing text produced by the sustainability team but a self-commitment owned by the top of the organisation. It provides the frame into which the risk analysis, preventive and remedial measures and the complaints procedure all fit.
The Act prescribes three mandatory elements. First, a description of the procedure by which the company discharges its due diligence duties – how risk management, risk analysis, preventive and remedial action, the complaints procedure and documentation are organised, and who is internally responsible. Second, the priority human rights and environmental risks the company has identified for itself on the basis of its risk analysis; a generic list of conceivable risks is not enough, what is required is the company-specific outcome of the prioritisation. Third, the resulting expectations the company addresses to its own employees and to suppliers in the supply chain – the anchor point for supplier codes of conduct and contractual assurances.
The statement only takes effect through communication: it must be communicated to employees, the works council, direct suppliers and the public. In practice this means permanent publication on the corporate website, distribution via intranet and onboarding, inclusion in tender and contract documents and, where useful, translation into the languages of the sourcing markets. Nor is it a one-off document: where the risk situation changes significantly – through new business lines, products or supply relationships – the statement must be updated as part of the annual and event-driven effectiveness review. It is also worth noting that the German regime is currently in flux: the EU Corporate Sustainability Due Diligence Directive (CSDDD) likewise requires, in Article 7, a due diligence policy integrated into company policies, but its transposition timeline was pushed back by the EU Omnibus initiative and remains subject to political negotiation, and German reporting and enforcement rules have been eased in the meantime. The obligation to adopt a policy statement itself continues to apply.
Legal Basis
Section 6 (2) LkSG (policy statement on the human rights strategy); Section 6 (5) LkSG (effectiveness review and updating); Sections 4, 5 LkSG; Article 7 CSDDD (EU) 2024/1760
Practical Example
A mechanical engineering company with 1,400 employees has completed its first LkSG risk analysis and identified three priority risks: occupational safety shortcomings at foundries in South-East Asia, raw materials sourced from conflict-affected regions, and discrimination risks in the use of agency workers at its own plant. The compliance officer drafts a policy statement that describes the due diligence procedure with clear responsibilities, names precisely those three risk areas, and spells out concrete expectations of employees and suppliers – prohibition of child and forced labour, freedom of association, occupational safety standards. Management formally adopts the statement and records this in the minutes; it is then published on the website, presented on the intranet and at the works meeting, handed to the works council, and attached to all new framework agreements with direct suppliers. Adoption, communication channels and dates are documented so that implementation can be evidenced to auditors and business partners.