Five Years After Pioneering CA Transparency Law, Business Resource Expanded and Re-Launched

On the five-year anniversary of SB 657, a landmark California law to combat human trafficking, online business resource KnowTheChain announced its expansion to help companies improve corporate transparency and responsible supply chain management practices. KnowTheChain was originally created to document corporate compliance with the California Supply Chain Transparency Act (SB 657).

Since the passage of SB 657, new laws and regulations in the United States, United Kingdom, and European Union are emerging that require corporations to disclose their efforts to eradicate forced labor from their supply chains. As this trend gains momentum, corporations are increasingly expected to operate transparently and responsibly.

“Forced labor is a well-documented problem in the supply chains of global businesses around the world. Companies without effective policies and practices may be contributing to the exploitation of people unknowingly,” said Killian Moote, Director of KnowTheChain. “We are expanding to be a resource that can increase understanding and action by companies on these issues. We believe corporations have an opportunity to meaningfully contribute to the eradication of forced labor in their supply chains.”

In a new insights brief also released on the anniversary of SB-657, KnowTheChain reviewed the impact of five years of this pioneering law on 500 companies and outlined recommendations for future legislation. The briefing calls for improved corporate transparency, better guidance for companies, and that compliance criteria be based on supply chains risks rather than tax classifications. Because of disclosure inaction by the California Attorney General, there is no information publicly available on which corporations are subject to SB 657. KnowTheChain was able to identify 19 percent of an estimated 2,600 companies that were approached by the Attorney General about the law.

Among the 500 companies reviewed by KnowTheChain, almost half did not disclose under all five requirements of the law, and 29 percent did not provide any disclosure statements.

Founded by Humanity United in 2013, KnowTheChain is maintained in partnership with the Business & Human Rights Resource Centre, Sustainalytics, and Verité.