Food, Beverage Companies Lagging on Addressing Forced Labor Risks: Report

Why It Matters

The weak scores expose massive ESG and regulatory risks for the sector, threatening investor confidence and potential legal liability as governments tighten forced‑labor disclosure rules.

Key Takeaways

• Average forced‑labour score 15/100 across 45 firms.
• Only Coles and Woolworths exceed 50 points.
• Supermarkets outscore packaged foods and meats.
• Jurisdictions with bans yield higher compliance scores.
• Board oversight disclosed by just 40% of firms.

Pulse Analysis

The food and beverage industry feeds billions yet remains a hotspot for forced‑labor abuses, a problem amplified by climate‑driven supply‑chain shocks. The International Labour Organization estimates illicit profits from forced labor at $236 billion, with agricultural work generating roughly $5 billion of that value. As consumer scrutiny intensifies, investors are demanding transparent, verifiable data on labor practices, pushing companies to move beyond high‑level codes of conduct toward actionable due‑diligence.

The latest KnowTheChain benchmark paints a stark picture: an average score of 15 out of 100 signals that most firms are still anchored in paper promises. While 91 % claim to have supplier codes prohibiting forced labor, only 3 % demonstrate responsible purchasing, and a mere 5 % disclose remediation mechanisms. Regional analysis reveals that firms in countries with import bans and mandatory disclosure—most notably Australia—outperform peers in Europe, the United States, Asia and Latin America, underscoring the catalytic role of regulation in driving compliance.

Looking ahead, tighter legislation such as the U.S. Uyghur Forced Labor Prevention Act and the EU’s upcoming due‑diligence directive will force companies to embed robust monitoring, third‑party audits, and real‑time traceability into their supply chains. Technology solutions—blockchain provenance, AI‑driven risk analytics, and satellite monitoring—offer scalable pathways to bridge the gap between commitment and practice. Early adopters that integrate these tools can mitigate legal exposure, protect brand equity, and meet the rising expectations of ESG‑focused investors.