The clothes you wear, the phone you use, the food you eat. Every supply chain has a story that few companies choose to read to the end.

The scene is ordinary. A fast fashion warehouse in Europe, shelves filled with T-shirts priced at 6 euros. Kilometres away, in a windowless shed in Dhaka's industrial district, a 23-year-old woman works twelve hours a day making that same T-shirt. She did not sign a contract. She paid a recruiter to find the job. That sum, larger than she will earn in months, keeps her tied to that place. She cannot leave.

This is not an isolated case. It is not even a particularly new story. What has changed in 2025 is that whoever sells that T-shirt in Europe can no longer claim not to know. In fact, they have a legal obligation to verify it.

30 July is the International Day against Human Trafficking, established by the UN through resolution A/RES/68/192 in 2013. The theme chosen for 2025 is: "Human Trafficking is Organised Crime. End the Exploitation." This is a precise choice, pointing at the structured networks managing human trafficking on a global scale. But there is a dimension of that exploitation that awareness campaigns rarely address: the one flowing inside the supply chains of the most ordinary companies. The one that requires no gangster-style traffickers, just intermediaries who ask no questions and buyers who do not ask too many.

The numbers no sustainability report shows

According to the latest ILO, Walk Free and IOM estimates (Global Estimates of Modern Slavery, 2022), at any given time there are approximately 27.6 million people in situations of forced labour worldwide. They are not prisoners of old wars. Most work in agriculture, manufacturing, domestic service, fisheries and construction: sectors that appear directly or indirectly in the supply chains of almost every large global company.

Of these 27.6 million people, approximately 17.3 million are exploited in private contexts: companies, farms, construction sites. The remaining 10 million are in state-imposed forced labour. Among the 27.6 million, 3.5 million are minors. According to Save the Children's 2025 report, in 2022 more than one in three trafficking victims was under 18.

Source: ILO, Walk Free, IOM, Global Estimates of Modern Slavery: Forced Labour and Forced Marriage, 2022

The UNODC, in its report for the 30 July 2025 Day, notes that between 2020 and 2023 more than 200,000 trafficking victims were officially identified worldwide. But the agency itself underlines that this is the tip of the iceberg: the vast majority of cases are never detected. 74% of traffickers identified in that period belonged to structured criminal organisations. Yet trafficking does not live only in the most violent criminal circuits. It also lives in labour contracts that nobody checks, in procurement awarded to whoever cuts all costs, in cascading subcontracting that makes the supply chain opaque even to those managing it.

Where exploitation hides in the supply chains we use every day

 The word "trafficking" evokes specific images: clandestine borders, forced prostitution, criminal networks. All real. But alongside that form of exploitation, and often overlapping with it, there is a much wider grey zone: forced labour inside legal productive supply chains. No less serious. Much harder to see.

Sources: ILO Global Estimates of Modern Slavery 2022; Everstream Analytics, Forced Labor in Supply Chains 2025; ILO, Advancing Decent Work in Supply Chains 2025

One figure is particularly significant for those working in the textile industry: according to the ILO's March 2025 report on advancing decent work in supply chains, the manufacturing sector (which includes textiles and clothing) accounts for nearly one fifth of all forced adult labour globally, approximately 3 million people. And the exploitation concentrates precisely in the lower tiers of the supply chain: in level two and three subcontractors, those who rarely appear in a qualification questionnaire.

There is also a less expected figure that concerns the energy transition. Solar panel production depends on polysilicon, and a significant share of global polysilicon comes from Xinjiang, the Chinese region at the centre of Uyghur forced labour allegations. Battery production for electric vehicles depends on cobalt, and over 70% of global cobalt is extracted in the Democratic Republic of Congo, where artisanal mines systematically use child labour. The green transition is not automatically a just transition.

Companies do not choose to participate in forced labour. They choose not to look where it would be uncomfortable to look. That choice, today, has a legal name.

The CS3D: when responsibility stops being voluntary

For years, the response of large companies to forced labour risks in supply chains relied on codes of conduct, supplier questionnaires and periodic social audits. Instruments that have value, but also a structural limitation: they depend on the cooperation of those being audited and rarely go below the first tier of supply, where exploitation concentrates most.

The Directive (EU) 2024/1760 on Corporate Sustainability Due Diligence (CS3D, or CSDDD) changes this logic. It does not ask companies to publish a report on risks that might exist in the supply chain. It requires them to act: identify, prevent, mitigate and remedy negative impacts on human rights and the environment across the entire chain of activities. And among the explicitly included human rights is the prohibition of forced labour, debt bondage and human trafficking for labour purposes.

Companies subject to the directive (with more than 1,000 employees and above 450 million euros in turnover, thresholds set by the 2026 Omnibus Package) must adopt a due diligence plan that identifies concrete supply chain risks, establishes preventive measures prioritised by severity and likelihood, defines reporting mechanisms accessible to workers, and accounts for progress. The penalties provided reach 5% of net worldwide turnover. On top of this comes the possibility of civil liability for damages caused.

ESRS S1 and workers in the value chain: what must be reported

On the reporting side, the European standard ESRS S1 (Workers in the Value Chain) requires companies subject to the CSRD to assess and communicate impacts, risks and opportunities related to workers along the entire value chain. Not just direct employees: also those working for suppliers, sub-suppliers and subcontractors.

Among the aspects to report under ESRS S1: working conditions, respect for fundamental human rights, presence of forced or child labour in the supply chain, reporting mechanisms accessible to workers, and measures adopted to mitigate identified risks. These are not statements of intent: the standard requires data, evidence, concrete actions and measurable results.

The intersection of CSRD/ESRS S1 and CS3D creates a coherent system: on one side, the obligation to report impacts on supply chain workers; on the other, the obligation to actively identify and manage them. Companies subject to both regulations face a concrete operational challenge: building real visibility into their supply chain, beyond the first tier.

What responsible companies do: beyond the social audit

The traditional social audit, where an external team visits a supplier facility and ticks a checklist, is a necessary but insufficient instrument. Deep exploitation in supply chains is almost impossible to detect in an announced visit limited to the production site. Companies building more effective approaches know this, and are moving in different directions.

Visibility at multiple supply chain tiers. Most supply chain mappings stop at tier one: the direct supplier. Advanced practice descends to tiers two and three, where exploitation is statistically most concentrated. This requires more complex and costly mapping, but is the only way to have a realistic picture.

Accessible grievance mechanisms for workers. The CS3D explicitly requires companies to establish channels through which workers in the supply chain can report violations. Not a helpline number on factory posters: genuinely accessible mechanisms, in workers' languages, with anonymity protection and non-retaliation guarantees. Building these channels is technically simple. Making them used requires investment in trust.

Responsible purchasing. Part of supply chain exploitation stems from the purchasing conditions large companies impose on suppliers: prices too low, impossible delivery timelines, last-minute order cancellations. These behaviours create the economic pressure pushing suppliers to cut labour costs. Companies building more ethical supply chains are reviewing their purchasing policies, paying prices that allow decent working conditions and sharing with suppliers the cost of required improvements.

Documented traceability. Knowing where raw materials come from is not just a marketing matter. It is the foundation on which any real form of accountability is built. Some companies are adopting digital traceability systems, from blockchains to supply chain management platforms, to document the origin of materials and the conditions under which they were produced.

 The global regulatory framework is becoming increasingly stringent in this area

The European CS3D is no exception. It is part of a global regulatory movement that is transforming responsibility for supply chains from an ethical principle into a legal obligation with tangible consequences.

The UK Modern Slavery Act (2015) and the Australian Modern Slavery Act (2018) require large companies to publish annual statements on the risks of modern slavery in their operations and supply chains. The US Uyghur Forced Labour Prevention Act (2022) establishes a legal presumption: any product containing materials from the Xinjiang region is deemed to have been produced using forced labour until proven otherwise, resulting in an import ban. The French Duty of Vigilance Act (2017) and the German Supply Chain Due Diligence Act (2021) had already foreshadowed the European approach set out in the CS3D. Translated with DeepL.com (free version)

In this context, human trafficking ceases to be merely a public security issue and becomes an operational, legal and reputational risk for any business operating within global supply chains. Not because businesses are guilty of organising human trafficking, but because they may be complicit in the impunity of those who do so, if they choose to turn a blind eye.

Where to start: practical questions for a hands-on approach

Human rights due diligence across the supply chain cannot be established overnight. However, there are practical questions that any business can start asking itself today, regardless of its size or sector.

• Do I know my second- and third-tier suppliers? Do I have a supply chain map that goes beyond those who invoice me directly?
• Do I know where the critical raw materials I use come from? Cotton, minerals, natural fibres, agricultural ingredients: is there a known country of origin that poses a high risk?
• Do the prices I pay to my suppliers cover the cost of decent working conditions? Or am I creating economic pressure that is inevitably passed on to the most vulnerable workers in the supply chain?
• Is there a mechanism in place through which workers at my suppliers’ sites can report exploitative conditions? Is anyone monitoring this?
• If you are preparing a CSRD report or undertaking CS3D due diligence: does the materiality analysis cover the impacts on workers in the value chain? Has ESRS S1 been assessed?

None of these questions has a perfect answer. Many companies discover, as soon as they start looking, that their visibility into their supply chain is much more limited than they had thought. This realisation is not a setback: it is the starting point for any responsible approach.

At Kyklos Carbon, we support businesses in assessing social risks within their supply chains, developing responsible procurement policies, and reporting in accordance with ESRS S1 and CS3D requirements. We are not a humanitarian organisation: we are an ESG consultancy that recognises that true sustainability also involves understanding how and under what conditions the products being sold are manufactured.

 A day that is relevant even to those who do not work in the field of human rights

30 July is not just a day for NGOs. It is a day for anyone involved in making decisions about purchasing, procurement and the selection of suppliers. Any decision taken without considering what happens at the lowest levels of the supply chain is a decision that potentially contributes to the impunity that allows exploitation to continue.

Human trafficking thrives in a climate of opacity. In global supply chains, that opacity takes the form of undeclared subcontracting, unknown suppliers and untraceable sources of raw materials. European regulations are calling on companies to shed light on this grey area. Not to punish them, but to make them an active part of the solution.

There is no such thing as a ‘clean’ supply chain by default. There are companies that have chosen to take a closer look, and those that have chosen not to. Today, that choice is no longer merely an ethical one. It is strategic, legal and subject to accountability.​

Sources 

• ILO, Walk Free, IOM: Global Estimates of Modern Slavery: Forced Labour and Forced Marriage, 2022
• ILO: Advancing Decent Work in Supply Chains. Textiles and Clothing Sector, marzo 2025
• ONU Italia: Giornata contro la tratta di esseri umani 2025: tema, dati, campagna
• Vatican News: Giornata mondiale contro la tratta, allarme globale ONU, luglio 2025
• Direttiva (UE) 2024/1760: Corporate Sustainability Due Diligence Directive (CS3D)
• Everstream Analytics: Forced Labor in Supply Chains, Risks in 20
• ImpACT International: Forced Labor in Global Supply Chains Persists in 2025 Despite Regulatory Pressure
• Stop Modern Day Slavery: The CS3D and corporate accountability for forced labour in supply chains