Sustainability laws
In more than 20 countries as well as in the European Union (EU), social and environmental regulations have already been enacted these last years. Among those, the LKSG for Germany (Lieferkettensorgfaltspflichtengesetz, also called German Supply Chain Act, or Law for sustainable Due Diligence) and the AGEC Law in France (anti-waste law for circular economy). What are those laws? And what do they entail? Find out in this article.
LKSG – the German Supply Chain Act
The LKSG and its objectives
The LKSG stands for Lieferkettensorgfaltspflichtengesetz in German, which can be translated as the German Supply Chain Act. It came into force on January 1st, 2023. Since July 2024, this law applies to all companies operating in Germany with more than 5000 employees and an annual turnover of more than €1.5bn.
The objectives of this legislation are diverse:
Ensure companies hold accountability of their Supply Chain impacts.
Mitigate and prevent environmental and human rights violations.
Promote ethical and responsible practices over global Supply Chains.
AGEC – Anti-Waste Law for Circular Economy
The AGEC Law and its objectives
AGEC stands for Anti-Gaspillage pour l’Économie Circulaire in French, which is translated as the Anti-Waste Law for Circular Economy. This law applies to all producers, importers, and distributors of waste-generating consumer products in France and came into force by 01.01.2020.
The objective of this legislation is to break the model of linear economy (based on extract, manufacture, consume, throw away), and instead develop and adopt a circular economic model based on:
Eco-design of products
Responsible consumption
Extension of shelf life
Recycling of products and waste.
Human Rights Empowerment
According to the Walk Free Foundation and its flagship report, the Global Slavery Index, there is an estimated 50 million people living in modern slavery on any given day in 2021. This marked an increase of 10 million people since 2016. Due to the fact that forced labor continues to be a significant issue in global supply chains in the 21st century, governments across the globe are passing regulations to prevent the import of goods produced with forced labor.
Retraced supports both brands and suppliers to trace their purchase orders down to raw material level, identify forced labor risks and collect all required chain of custody documentation to show compliance and release detained shipments in no time.
To Sum Up
Companies need to establish a risk management system to identify and mitigate Supply Chain risks. They have to establish ethical guidelines and a policy statement, and implement measures to prevent violations while collaborating with their suppliers. If issues arise, corrective actions should be taken in conjunction with direct suppliers. Moreover, grievance mechanisms must be in place for stakeholders to report concerns and due diligence responsibilities extend to the broader supplier network, encompassing indirect suppliers. Finally, activities must be documented and reported for transparency and compliance.
Appendix - How can Retraced help you comply to LKSG and AGEC?
Requirements Table of LKSG and Retraced coverage
Requirements (of the LKSG) | Retraced coverage | Retraced features & functionalities |
Conduct frequent risk analysis | Additional consultancy / upgrade service | Retraced consultants can support sharing best practices and help in the implementation of a thorough risk management. |
Appointing internal responsibilities | Additional consultancy / upgrade service | Due to the inherent nature of this law section, we are unable to offer this service on behalf of our clients, as it must be set by company internally. However, our team of experts can provide support and knowledge on how to establish this process internally. |
Conduct regular and ad-hoc risk analysis | Supported on platform | Our automated Risk Analysis covers all requirements of the GSCDDA. |
Code of Conduct and Policy Statement | Supported on platform | Our Supplier Questionnaire feature enables swift automation, empowering brands to efficiently generate and distribute their Code of Conduct and Policy statements to all suppliers, both direct and indirect, with just a few clicks. |
Implement and collaborate on preventive actions at own company and with direct suppliers | Supported on platform | Potential risks can be mitigated by actively working on preventive actions in our CAPA module. |
Implement and collaborate on corrective actions at own company and with direct suppliers | Supported on platform | Potential risks can be mitigated by actively working on preventive actions in our CAPA module. |
Implementation of grievance mechanisms | Additional consultancy / upgrade service | Grievances can be managed in our CAPA module, however an effective grievance mechanism requires collaboration with local organizations in production countries. |
Implementation of the requirements at indirect suppliers | Supported on platform | With the supply chain mapping & traceability modules, indirect suppliers can be identified and GSCDDA requirements can be implemented. |
Documentation and reporting | Supported on platform | GSCCDA related activities can be documented in the risk analysis and CAPA modules and reports can be exported. |
Requirements Table of AGEC and Retraced coverage
Retraced has been designated as an approved solution by DEFI, the platform for investment and development of the French fashion industry, and ADEME, the Environment and Energy Management Agency, in France.
Requirements (of AGEC) | Retraced coverage | Retraced features & functionalities |
Product Traceability | Additional consultancy / upgrade service | Our Supply Chain Mapping and PO Tracing features allow our clients to trace and share the product journey to consumers through our end-consumer communication widget feature. |
Consumer information on the incorporation of recycled material | Additional consultancy / upgrade service | The percentage of recycled material is automatically calculated based on the products raw material composition and visualized to end-consumers via our communication widget (QR & webshop). |
Consumer information relating to the presence of plastic microfibers in the products | Additional consultancy / upgrade service | The presence of plastic microfibers is automatically calculated based on the products raw material composition and visualized to end-consumers via our communication widget (QR & webshop). |
Consumer information on the presence of a dangerous substance | Additional consultancy / upgrade service | Users can indicate the hazardous material details via their product page. Once users add a hazardous material that has at least 0.1%, it is visualized to end-consumers via our communication widget (QR & webshop). |
Consumer product information on recyclability | Pending for regulation update | Currently there’s no support for this, as ADEME is in the process of aligning this requirement with the European PEF score. Our team is closely monitoring the latest legislation updates. |
Packaging recyclability information | Pending for regulation update | Currently, there’s no specific information regarding the packaging of textile items and what should be included. At present, Retraced does not support this feature, and our team is diligently monitoring any governmental updates in requirements. |
Environmental information must be electronically accessible to the public and readily available to consumers at the moment of purchase | Additional consultancy / upgrade service | Consumers can effortlessly access real-time product data by scanning the QR code and access our end consumer widget or directly through the brand's webshop. |
Product information must be displayed in French | Additional consultancy / upgrade service | Our end-consumer widget is now available in French. We also support English, German and Spanish. |
ECO SCORE rating | Pending for regulation update | Currently there’s no support for this, as ADEME is in the process of aligning this requirement with the European PEF score. Our team is closely monitoring the latest legislation updates. |