The proposed US Corporate Sustainability Due Diligence Act, introduced to Congress in July 2025, signals a major shift in expectations for large US multinationals. If passed, this legislation would mandate that companies publicly disclose human rights and environmental risks throughout their global supply chains. Although still in draft form, the Act aligns with international trends toward greater supply-chain transparency and responsible business conduct. For compliance teams, the message is clear: it’s time to prepare, and early action can ease future reporting burdens.
The draft legislation focuses on large companies—those with annual revenues exceeding $1 billion and significant operations abroad. It proposes annual due diligence disclosures that identify, assess, and mitigate risks related to forced labor, child labor, land rights violations, environmental degradation, and climate impacts. Importantly, the Act would require companies not only to report on identified risks but also to outline concrete steps taken to address them. This emphasis on accountability places new demands on corporate supply-chain management systems.
To get ahead of these requirements, US firms can pilot supplier risk-scoring methodologies using freely available open data. Two valuable resources stand out: the US Department of Labor’s Sweat & Toil app and the Fair Trade certified producer database. The Sweat & Toil database provides country- and commodity-level information on child labor and forced labor risks, making it a practical starting point for mapping high-risk geographies and supply-chain tiers. Similarly, the Fair Trade database allows firms to cross-reference their suppliers with certified producers who have met specific social and environmental standards.
A practical approach would involve compiling a master supplier list, segmented by location and key raw materials. Compliance teams can then overlay Sweat & Toil and Fair Trade data to assign preliminary risk scores. For instance, suppliers operating in regions flagged for high incidence of forced labor in agriculture or mining would receive higher risk designations. Conversely, suppliers with third-party social or environmental certifications could receive positive risk modifiers. These scores provide a foundation for prioritizing deeper due diligence efforts and planning supplier engagement.
Open-data risk scoring should be viewed as an iterative process rather than a one-off exercise. Supplier landscapes, regulatory frameworks, and local risk conditions evolve over time. Compliance teams can establish quarterly or semi-annual reviews to refresh their risk assessments using the latest data. Building this review cycle into existing supplier management systems ensures that companies maintain up-to-date insights into where their greatest risks lie—and where intervention is most urgently needed.
Beyond piloting risk scoring, firms should also consider developing templates for supplier self-assessments that reflect the key themes of the proposed Act. These templates might cover labor standards, grievance mechanisms, environmental management practices, and traceability efforts. Suppliers can be asked to complete these assessments alongside contract renewals or major order placements. Responses should be integrated into the company’s broader risk analysis and supplier performance reviews.
While many US multinationals already conduct some form of supply-chain due diligence, the proposed legislation would formalize and standardize these efforts. It also brings a greater expectation of transparency: companies will need to publish meaningful data, not just high-level policy statements. This raises the bar on data integrity, documentation, and public disclosure readiness. Compliance teams can begin preparing by reviewing existing data collection practices and identifying any gaps that could hinder future reporting.
One useful step is to create internal dashboards that visualize supplier risk profiles, remediation progress, and certification coverage. These dashboards can draw from open data, supplier declarations, audit findings, and internal investigations. They can help compliance officers, executives, and board members monitor performance against due diligence objectives. Over time, such tools also support external reporting by streamlining the compilation of verified data for public disclosures.
Early action offers several advantages. By piloting these systems now, companies can fine-tune their methodologies, build internal capabilities, and cultivate stronger relationships with suppliers. They can also engage proactively with stakeholders—including investors, customers, and civil society groups—demonstrating their commitment to responsible sourcing before the law compels them to do so.
The proposed US Corporate Sustainability Due Diligence Act reflects a growing consensus that large corporations must take concrete steps to identify and address supply-chain risks. While the law’s final form and timeline remain uncertain, companies that begin preparing today will be better equipped to meet its demands. By leveraging open-data tools such as Sweat & Toil and Fair Trade, piloting supplier risk scoring, and establishing iterative review processes, US multinationals can build resilient, transparent supply chains that align with emerging global standards for corporate responsibility.