ESG as a compliance obligation
As the importance of ESG issues grows, so do the demands on managing directors: Once the company has decided to comply with certain ESG criteria, managing directors must ensure, by implementing a suitable organizational and control structure for the company, that the ESG criteria are actually observed. It must be ensured that indications of deficiencies actually reach the management. Only then, the management will be in a position to fully clarify the facts and remedy any deficiencies.
In any case, the various legal requirements in the ESG area must be observed and implemented, from regulatory to environmental to data protection requirements, and much more. A particularly important new obligation is now being added: From 01.01.2023 on companies in Germany with at least 3,000 employees (or from 2024 on with at least 1,000 employees) are required to comply with the Supply Chain Sourcing Obligations Act (LkSG). With the LkSG the German legislation sets global standards in supply chain compliance. The companies concerned must comprehensively identify risks to human rights and environmental protection in their supply chains, implement preventive measures and remedy identified violations.
We support our clients in creating such an organizational and control structure in their company. Moreover, with increasing legal implementation of ESG issues, such as the Supply Chain Duty of Care Act, the personal liability risks for business managers are growing. Due to their compliance responsibility, managing directors are obligated to pursue indications of violations of the law, to punish them, and to stop them permanently. If they fail to comply with this obligation, they are liable to the company for any resulting damage. In the case of managers failing in fulfilling their duties, we support our clients in determining the facts, examine legal options for action against managing directors and assist our clients in enforcing claims for damages.
We also advise clients from various industries on the implementation of the various legal requirements, including the implementation of the obligations of the LkSG - from risk analysis to the formulation of the policy statement to the establishment of a risk management system. We also draft LkSG-compliant supply contracts, thereby preventing liability risks and regulatory measures or sanctions.
Our Corporate Team is available to you at any time to answer your questions.