Plaintiffs lawyers are gunning for your supply chain. It is part and parcel of a growing call for supply chain transparency—stakeholder demands that companies account for their business practices on such issues as human rights, environmental sustainability, fair labor practices and ethical sourcing. Companies are familiar enough with the consequences of false and misleading financial reporting to take it seriously. But the emergence of transnational supply chain litigation in the U.S. court system suggests that nonfinancial performance reporting requirements, like those mandated by California’s Transparency in Supply Chains Act and the U.K.’s Modern Slavery Act, may be equal in importance to compliance with anti-bribery and anti-corruption laws—a vital corporate function. The website disclosures required by these laws, like Securities and Exchange Commission registration statements, are manna from heaven for the plaintiffs class action bar.

Transnational supply chain litigation is not a new phenomenon, but the playing field is quickly changing. So are the players. What began two decades ago with foreign workers seeking compensation in federal courts for alleged human rights abuses on theories of corporate complicity with violations of international law has now expanded to encompass not only victims suing companies in state courts for personal injury under common-law theories of negligence, but also shareholder activists and consumers seeking relief based on a desire to make investments and purchase goods that align with their personal preferences and “stand for something.”

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