Overview
Which companies are directly subject to the LkSG and why companies outside its scope can also be indirectly affected. Relevant for all companies that want to check whether and how the LkSG affects them.
Directly affected
The LkSG applies to companies, regardless of their legal form, that
have their head office, principal place of business, administrative headquarters or registered office, or a branch (Section 13d German Commercial Code) in Germany, and
usually employ at least 1,000 employees in Germany (Section 1 (1) LkSG). Employees posted abroad are included.
The threshold was 3,000 employees in 2023 and has been 1,000 employees since 1 January 2024. In groups, the employees in Germany of all group companies are counted towards the parent company (Section 1 (3) LkSG).
Indirectly affected
Companies outside the scope often still come into contact with the obligations of the LkSG – above all as suppliers of an obligated company. For example, they are asked to sign a code of conduct or to provide a self-assessment on human rights and environmental standards.
Indirectly affected companies are not themselves subject to the legal obligations or to fines.
Current status
The due diligence obligations of the LkSG continue to apply unchanged: risk management, risk analysis, policy statement, preventive and remedial measures, complaints procedure and internal documentation.
The annual reporting obligation towards BAFA is to be abolished retroactively by the LkSG amendment. Since 7 November 2025, BAFA no longer reviews or accepts reports (BAFA, German).
The EU Corporate Sustainability Due Diligence Directive (CSDDD) was amended by Directive (EU) 2026/470. The LkSG applies until it is transposed into German law.
Next steps
Check whether your company is directly or indirectly affected.
Define the specific requirements: statutory due diligence obligations (e.g. risk analysis and documentation) and/or expectations of your customers and other stakeholders.
Determine the scope of the required measures and evidence.
Further information