Supply-Chain Transparency

The California Transparency in Supply Chains Act — enacted as SB 657 and often shortened to the "CA Transparency Act" — is a California disclosure law. It requires certain large companies doing business in the state to tell the public what they are doing to root out forced labor, slavery and human trafficking from their supply chains. The core idea is simple: sunlight. Rather than dictating exactly how a company must run its supply chain, the law obliges qualifying businesses to disclose their efforts so customers, investors and the public can see them and judge for themselves.

It is important to be clear about what this is and is not. This is a legal disclosure requirement, not a certification you earn or a management-system standard you get audited against. There is no certificate at the end and no accredited body issuing one. What the law asks for is an accurate, publicly available statement describing your program — and, behind that statement, a real program that backs up what you have written.

The obligation centers on your direct supply chain for the tangible goods you offer for sale. The disclosure is expected to be posted on your company website, with a conspicuous and easy-to-find link from your homepage. Companies without a website are expected to provide the disclosure another way on request. In short, the Act turns supply-chain integrity from a private matter into a public commitment.

The Act applies to companies that meet a specific set of thresholds rather than to every business operating in California. To fall within scope, a company generally needs to be a retail seller or manufacturer, be doing business in California, and have annual worldwide gross receipts exceeding $100 million. All three conditions have to line up before the disclosure obligation attaches.

The $100 million figure is a worldwide number, not just California revenue, so a company headquartered elsewhere — or overseas — can still be covered if it sells or manufactures goods and has a sufficient business presence in the state. The retailer-or-manufacturer scope also means the law is aimed squarely at businesses that put physical products into the market, rather than at pure service providers. If you sit near any of these lines, it is worth confirming your status carefully, because the determination turns on how these terms are defined under California law.

Even companies that fall below the threshold often choose to publish a comparable statement. Large customers increasingly pass their own expectations down the chain, and a supplier that can already point to a credible supply-chain program tends to win trust faster. So while only larger retailers and manufacturers are legally required to disclose, the practical pressure to have something real to say reaches much further down the supply chain.

At a minimum, a covered company's disclosure must address five specific areas. The law does not tell you what your answer in each area has to be — a company can honestly disclose that it does little in a given area — but it does require you to speak to all five, clearly and accurately. The five areas are:

• Verification — whether, and to what extent, you verify your product supply chains to evaluate and address risks of human trafficking and slavery, and whether that verification is done by a third party.
• Audits — whether you conduct audits of suppliers to evaluate compliance with your standards for trafficking and slavery, and whether those audits are independent and unannounced.
• Certification — whether you require direct suppliers to certify that materials incorporated into your products comply with the laws on slavery and human trafficking of the country or countries in which they do business.
• Internal accountability — whether you maintain internal accountability standards and procedures for employees or contractors who fail to meet your standards on trafficking and slavery.
• Training — whether you provide relevant employees and management, especially those with direct responsibility for supply-chain management, with training on human trafficking and slavery, particularly on mitigating risks within supply chains.

The disclosure is then posted publicly, typically on your website with a conspicuous homepage link. The recurring theme across all five areas is honesty and specificity: the statement should describe what you actually do, not what you aspire to do. A vague or copied statement that does not match reality is the very thing that creates exposure, because the disclosure is a public representation about your business.

The first reason is straightforward: it is the law. Covered companies are required to make the disclosure, and a statement that is missing, hidden or plainly inaccurate invites scrutiny. We do not offer legal advice on enforcement or penalties — those are questions for your counsel — but the general point holds: this is a compliance obligation, and treating it casually carries real risk.

The second reason is reputation and brand. A supply-chain disclosure is a public document. Customers, journalists, advocacy groups and competitors can all read it, compare it against your conduct, and hold you to it. A thin or boilerplate statement can do more harm than good, signaling that a company treated forced labor as a paperwork exercise. A credible, specific statement backed by a real program does the opposite — it builds trust.

The third reason is that this obligation rarely stands alone. Buyer and investor expectations around ESG and human-rights due diligence increasingly ask the same questions the Act does, and other modern-slavery disclosure regimes around the world overlap heavily with it. Building a genuine program once — verification, audits, supplier expectations, accountability and training — lets you answer California's law, satisfy demanding customers, and respond to other reporting regimes from a single, coherent foundation rather than scrambling for each one separately.

Our job is to help you build a program worth disclosing, and then help you disclose it accurately. We do not simply hand you a template statement to paste onto your website. Over more than 30 years, supporting 900+ organizations, we have learned that a disclosure only protects you when there is a real program standing behind it — so that is where we start.

We begin by assessing your supply chain and your current practices against the five areas the Act addresses: how you verify supplier risk, whether and how you audit, what you require suppliers to certify, how you hold your own people accountable, and how you train the staff who manage sourcing. From there, using our 10-Step Approach, we help you build the parts that are missing — the verification and audit routines, supplier certification language, internal accountability procedures and training — so the program is genuine and proportionate to your risk. Our documentation stays deliberately lean, typically a single-level system under 200 pages, written for the people who actually run it.

Finally, we help you draft a defensible, accurate disclosure statement that reflects what your program truly does and reads well to a demanding public audience. Because forced-labor risk overlaps with related work, we can align this effort with ethical-supply-chain audit schemes such as SMETA/Sedex and with anti-bribery management under ISO 37001, so your supply-chain integrity program holds together as a whole rather than as a series of disconnected obligations.

• Copying a competitor's statement — a borrowed disclosure rarely matches your actual practices, and the gap between words and reality is exactly what creates exposure. We write your statement from your real program.
• Words without a program — a polished statement backed by nothing invites hard questions. We build the verification, audit, accountability and training work first, so the disclosure has substance behind it.
• Assuming the threshold does not apply — the $100 million figure is worldwide, not California-only, and overseas companies can still be covered. We help you confirm your status carefully rather than guessing.
• Hiding the disclosure — a statement buried deep in a site does not meet the expectation of a conspicuous homepage link. We help you place it where it is meant to be found.
• Missing one of the five areas — the law requires you to speak to all five, even where your answer is limited. We make sure none is left out or glossed over.
• Treating it as one-and-done — supply chains and practices change, so a statement written once and forgotten drifts out of true. We help you set a rhythm to keep it accurate.
• Ignoring the overlap — running California's requirement in isolation from ESG expectations and other modern-slavery regimes duplicates effort. We build one coherent program that answers several demands at once.