Navigating global supply chains reveals an unsettling truth: forced labor is more widespread and hidden than many businesses realize.
Today, according to the latest Global Estimates of Modern Slavery (2022) from Walk Free, the International Labour Organization and the International Organization for Migration, more than 49.6 million people are trapped in forced labor. Of these, around 27 million are directly linked to the supply chains of multinational corporations. This stark reality clashes with the rising consumer demand for ethical sourcing and the tightening regulations aimed at eliminating forced labor worldwide.
Forced labor isn’t present in every supply chain, but the line between fair work and exploitation is often blurry. According to a recent study led by the International Labour Organization (ILO), forced labor generates $236 billion in illegal profits each year, and 86% occurs in the private sector.
For businesses, this presents serious risks—not just regulatory, but also legal and reputational. Exploitation isn’t always obvious at first glance. The first step to addressing the issue is improving supply chain visibility to identify warning signs and prevent companies from unknowingly contributing to modern slavery.
Adapting to Evolving Anti-Slavery Laws
Stronger consumer advocacy for ethical sourcing has driven global action against forced labor. Laws such as the UK Modern Slavery Act, the German Supply Chain Due Diligence Act, and the Uyghur Forced Labor Prevention Act reflect a major shift in how supply chain ethics are enforced.
The EU Corporate Sustainability Due Diligence Directive (CSDDD) is another example of tightening regulations, requiring companies to thoroughly investigate their supply chains for forced labor. Non-compliance can result in fines of up to 5% of global revenue, and soon, adherence to these standards may be necessary to secure EU public contracts.
The Growing Need for Supply Chain Intelligence
To comply with these laws and effectively combat forced labor, businesses must adopt advanced technology to enhance supply chain visibility and align their data with a complex web of global regulations.
Building a strategic intelligence capability is key. Companies need the right tools to analyze supply chain data, uncover hidden risks at every level, validate information, and generate insights that lead to better long-term risk decisions.
By transforming due diligence into a proactive strategy, businesses can not only ensure compliance but also protect their reputation and contribute to a more ethical global supply chain.
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