Across global supply chains, organisations ranging from banks and asset managers to retailers and manufacturers are increasingly expected to play an active role in identifying, managing and mitigating forced labor risks.
Regulatory scrutiny is intensifying, while stakeholders are demanding greater accountability for labour practices that may sit far beyond an organisation’s immediate operations, claims Moody’s.
These risks are often embedded deep within complex third-party ecosystems, spanning multiple geographies, industries and corporate structures, which makes visibility and oversight particularly challenging.
Forced labor risk is not only widespread, but frequently concealed within fragmented ownership structures and opaque supplier relationships. Limited disclosure around beneficial ownership in certain jurisdictions, combined with inconsistent regulatory standards across regions, can prevent organisations from gaining a clear picture of where risks lie. As a result, forced labor may remain undetected within extended business networks until it triggers regulatory action, reputational damage or operational disruption.
Without a robust, data-driven due diligence framework, organisations face growing exposure to non-compliance with modern slavery and forced labor regulations. Beyond regulatory penalties, associations with unethical labour practices can erode brand trust and investor confidence, while sudden supply chain disruptions may impact operational resilience. Addressing forced labor risk therefore requires a structured approach that goes beyond surface-level checks and static assessments.
Moody’s Forced Labor Risk Assessment has been developed to help organisations better understand and manage these complex exposures. The solution provides an evidence-based framework designed to support informed decision-making at different stages of the business lifecycle, whether during onboarding of new third parties or as part of continuous risk monitoring. By integrating multiple data sources and analytical techniques, the assessment aims to translate a highly complex risk area into actionable insight.
Built in collaboration with the Rights Lab at the University of Nottingham, the model combines proprietary datasets, advanced analytics and recognised global standards to generate meaningful risk intelligence. It enables organisations to quantify and interpret forced labor risk across business, industry and country dimensions, creating a foundation for more strategic and targeted mitigation efforts.
At the core of the assessment is a multi-factor risk model that produces an overall forced labor risk score. This score is broken down into three weighted sub-scores covering Business Risk, Industry Risk and Country Risk. These sub-scores are underpinned by a wide range of granular metrics, allowing organisations to drill into specific drivers of risk and identify high-risk areas within their networks.
Complementing the model is the Forced Labor Risk Assessment Check, which operationalises the framework through an automated and structured process for evaluating third-party risk. By streamlining data collection through surveys aligned to each sub-score, organisations can generate risk results that are categorised into clearly defined risk zones. These zones can be aligned to internal risk appetite and governance frameworks, helping teams prioritise follow-up actions and remediation efforts.
By implementing Moody’s Forced Labor Risk Assessment, organisations gain a more transparent and consistent way to navigate what is often an opaque area of compliance and risk management. The approach supports more efficient allocation of resources, enabling businesses to focus mitigation efforts where they are most needed. As forced labor remains a persistent global challenge, data-driven solutions such as this offer organisations greater clarity and confidence in taking meaningful action.
Copyright © 2026 FinTech Global
