Dejan Jasnic · Co-founder & Compliance Lead, Trusty · 20+ years anti-fraud & compliance · ACFE Swiss Chapter Board

The Act on Corporate Due Diligence Obligations in Supply Chains, known as the Supply Chain Due Diligence Act (LkSG), enacted in July 2021, represents a significant advance in the regulation of companies’ obligations with respect to their supply chains.

This law, in its section 6, paragraph 4, establishes specific requirements that companies must comply with in relation to a direct supplier related to human rights and environmental compliance in supply chains

These requirements, which go beyond traditional risk assessments, also extend to sub-suppliers under certain conditions, as stipulated in section 9, paragraph 3 of the same law.

With this regulatory framework in mind, how can companies ensure compliance? This is where tools like Trusty play a key role, offering technological solutions that facilitate and certify compliance with these obligations.

Key requirements of the Act: Section 6, paragraph 4

This provision of the standard establishes specific preventive measures that companies must implement with their direct suppliers, among which the following stand out:

  • Selection criteria based on human rights and the environment: The choice of suppliers cannot be based solely on economic criteria. Aspects such as respect for human rights and environmentally sustainable practices must be considered.
  • Contractual guarantees: Direct suppliers must contractually commit to meet the expectations set by the company’s top management and address these requirements throughout the supply chain.
  • Initial and ongoing training: It is necessary to provide training to suppliers to ensure that they understand and comply with their contractual commitments.
  • Contractual control mechanisms: Mechanisms should be established to verify compliance with the human rights and environmental commitments, implementing them in a risk-based manner.

The challenges of supply chain monitoring under the corporate due diligence obligations.

Despite the clarity of these requirements, companies face numerous challenges in implementing them. Some of the main obstacles include:

  • Complexity in supply chains: Many companies work with complex, global supplier networks, which makes effective monitoring difficult.
  • Lack of transparency: Suppliers and sub-suppliers do not always have clear or documented processes to demonstrate compliance.
  • Inconsistent compliance: Without the right tools, it is difficult to ensure that contractual commitments are applied uniformly throughout the supply chain.

How Trusty can help companies meet corporate due diligence obligations

From Trusty, we offer comprehensive solutions to efficiently address supply chain challenges. Our platform is designed to:

  • Assess suppliers for human rights, corruption, sanction, and environmental risks: We assess suppliers for critical risks, including human rights violations, corruption, sanctions, and environmental concerns, helping to ensure compliance with ethical standards.
  • Equip suppliers with preventive measures: The Trusty Platform ensures that suppliers are provided with the necessary compliance policies, training, and a reporting channel to address any potential non-compliance.
  • Certify suppliers based on risk profile and preventive measures: Trusty certifies suppliers according to their risk profile and the preventive measures they’ve implemented to mitigate potential risks.
  • Monitor supplier risk profile continuously: We offer tools to continuously monitor the risk profiles of your suppliers, ensuring that any emerging risks are identified and addressed promptly.

We help suppliers comply with supply chain requirements by simplifying the third party corporate due diligence and improve compliance credentials. Our platform enables you to implement preventive measures throughout your supply chain, ensuring that potential issues are addressed proactively and compliance is maintained at every stage.

Ultimately, complying with new regulations is a significant challenge for companies, but also an opportunity to demonstrate their commitment to human rights and sustainability. 

Integrating solutions such as Trusty enables organizations to guarantee regulatory compliance by ensuring that the requirements of the Act on Corporate Due Diligence Obligations in Supply Chains are met; assess and reduce supply chain risks; simplify the due diligence process for all parties; build compliance capabilities and credentials for suppliers, as well as ease the administrative burden and costs.

Frequently asked questions

Selection criteria based on human rights and the environment rather than price alone, contractual commitments from direct suppliers that flow down the chain, initial and ongoing supplier training, and risk-based control mechanisms to verify compliance.

Yes. Under the conditions set out in section 9, paragraph 3, the requirements extend to indirect suppliers.

Supplier networks are complex and global, suppliers and sub-suppliers often lack clear or documented processes, and without the right tools commitments are applied inconsistently across the chain.

By screening suppliers against watchlists and blacklists, assessing human rights, corruption, sanctions and environmental risks, equipping suppliers with policies, training and a reporting channel, certifying them by risk profile and monitoring that profile continuously.

Related reading: CSDDD vs EUDR vs national due diligence laws such as the LkSG, supply chain ethics requirements on human rights and the environment, and SME due diligence in 2026.

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