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City bosses brace for compliance headache as Germany’s ESG supply chain law kicks in

British firms with a physical presence in Germany are set to be fined if they fail to satisfy Germany's supply chain law

By Kristen McGachey
Compliance with the law involves firms creating a complete ESG inventory of their supply chains or showing they are taking steps to prevent human rights and environmental abuses
Compliance with the law involves firms creating a complete ESG inventory of their supply chains or showing they are taking steps to prevent human rights and environmental abuses Photo: Getty Images

A new German law mandating strict ESG audits of supply chains looks set to hit City firms with Germany-based offices, as well as other major UK companies, legal experts warn.

Firms could be fined up to 2% of global turnover for failure to comply with the German Supply Chain Act – or Lieferkettensorgfaltspflichtengesetz as it is called in German.

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