Applying the Transparency in Supply Chains guidance to 2025 modern slavery reporting
GoodBlog | read time: 6 min
Published: 24 February 2026
For the 2025 financial year, companies reporting under Section 54 of the Modern Slavery Act must ensure their Modern Slavery Statements reflect the UK government’s updated guidance on Transparency in Supply Chains. Published in March 2025, the guidance is more relevant than ever, as companies focus on preparing their statements for the 2025 financial year. Statements will be assessed against the updated guidance, so reporting already underway must reflect the new expectations.
While the law has not changed, expectations around disclosure have. Modern Slavery Statements produced this year will need to show credible human rights due diligence, provide clear insight into identified risks and actions taken, and demonstrate continuous improvement over time. Increasingly, organisations will be judged on the quality, depth, and impact of their reporting, not simply on the existence of policies or processes.
Why updated guidance on Section 54 reporting has been introduced
Since the Modern Slavery Act came into force in 2015, Section 54 has faced widespread criticism for failing to drive meaningful change in corporate behaviour or materially reduce modern slavery risks in supply chains. Reviews by Parliament, investors, and civil society groups have consistently highlighted that many Modern Slavery Statements are superficial and policy-led rather than practice-focused, provide limited insight into actual risks, and show little evidence of progress.
The updated guidance is a direct response to these concerns. Its purpose is to strengthen the effectiveness of the transparency regime, encouraging more meaningful disclosures and supporting better risk management across global supply chains. Crucially, the guidance raises expectations around the quality, depth and action-orientation of Modern Slavery Statements. It clarifies what good and best practice should look like, provides practical direction on reporting, and places greater emphasis on transparency, concrete action and alignment with recognised international standards.
At its core, the guidance reframes Section 54 reporting as:
- a statement to demonstrate human rights due diligence, aligned with the OECD Due Diligence Guidance and the UN Guiding Principles on Business and Human Rights (UNGPs)
- an ongoing improvement process, rather than a one-off annual disclosur
- a reflection of real risk management, where identifying and reporting modern slavery risks is expected, not a reputational failure
Key requirements of the 2025 Transparency in Supply Chains guidance
The guidance applies to all commercial organisations required to report under Section 54 of the Modern Slavery Act, namely those with a turnover of £36 million or more that are based in or carry out business in the UK.
While the statutory obligation remains, the guidance sets a higher benchmark for evaluation. Companies are expected to demonstrate:
- a clear understanding of their most salient modern slavery risks
- proportionate due diligence processes aligned to those risks
- evidence of action taken and how effectiveness is assessed, and
- year-on-year progress and learning
The six core reporting areas set out in the Modern Slavery Act remain the same (including organisational structure, policies, due diligence, risk assessment, effectiveness and training), but companies must now explain how these elements operate in practice, how they connect, and how the companies’ approach is evolving over time.
Section 54 reporting is no longer simply about stating whether policies or risks exist; it is about demonstrating how modern slavery risks are identified, managed, and progressively reduced.
Continuous improvement in Modern Slavery Statements: Level 1 and Level 2 disclosures
The guidance emphasises improvement over time, recognising that organisations will be at different stages of development. It introduces a maturity-based approach with two levels of disclosure:
Level 1 – good practice
Level 1 is aimed at organisations that have established the core components of a modern slavery programme.
Statements should show:
- clear governance and accountability, including board oversight
- structured risk assessment processes identifying priority risk area
- due diligence activities proportionate to those risks, and
- evidence that policies and procedures are implemented in practice
Level 2 – best practice
Level 2 is for those with more mature, embedded programmes.
Statements should go further by demonstrating:
- how risks have evolved over time and how responses have adapted
- how effectiveness is measured and how lessons learned inform future action
- transparency about challenges, limitations and areas for improvement, and
- active supplier engagement, worker voice mechanisms and remediation processes that influence decision-making
Importantly, the guidance does not expect all companies to be at Level 2 immediately. What matters is clarity about current maturity, transparency about gaps, and a clear plan to improve year on year.
Why the updated Transparency in Supply Chains guidance matters for businesses
The guidance is more than a reporting refinement; it signals how Modern Slavery Statements will increasingly be assessed by government, investors, customers, civil society and, in time, regulators.
The introduction of maturity levels highlights that progress and effectiveness will be scrutinised more closely. Companies will no longer be judged simply on the existence of a statement, but on whether it reflects structured risk identification, meaningful due diligence, and measurable improvement. Overstating maturity or failing to reflect operational reality could expose organisations to governance and reputational risk.
In practical terms, this means:
- tick-box or policy-only disclosures are unlikely to withstand scrutiny
- identifying and disclosing risks is expected and viewed as evidence of active management, not reputational weakness
- demonstrating effectiveness and learning carries greater weight than listing procedures and
- year-on-year progress is central, even where programmes remain imperfect
The guidance also aligns with the broader regulatory trajectory. With mandatory human rights due diligence regimes emerging in the EU and under consideration in the UK, Asia and Australia, Section 54 reporting is increasingly functioning as a foundation for more formal and broader due diligence obligations. Companies that treat it strategically now will be better positioned for the future.
For the top 100 UK-listed companies, the guidance is especially significant as they are evaluated against the CCLA Modern Slavery UK Benchmark. The benchmark examines companies’ modern-slavery-related disclosures, the extent to which they meet the requirements of Section 54 and, crucially, how closely those disclosures align with the TISC guidance. Through this framework, CCLA seeks to establish an objective assessment of corporate performance on modern slavery and to support investors’ engagement with these companies. In doing so, it harnesses competitive pressure between businesses as a lever to drive continuous improvement in practice. CCLA recommends companies familiarise themselves with the updated guidance, assess their current approach against at least the strengthened Level 1 expectations, and demonstrate clear governance, risk assessment and due diligence processes aligned with it.
Practical steps for companies preparing Section 54 Modern Slavery Statements
For organisations reporting on the 2025 financial year, the updated guidance provides a clear and practical roadmap. Statements should reflect the substance and effectiveness of the programme, rather than minor cosmetic updates to previous disclosures.
With the emphasis on continuous development, even organisations at the early stages of their human rights programme can produce a meaningful and compliant Modern Slavery Statement by being transparent about current practice and planned improvements.
To meet Level 1 (good practice) expectations, companies should focus on four core areas:
1. Governance and accountability
Explain how the anti-modern slavery programme (which can be part of a broader human rights programme) is governed, where accountability lies, and how board and senior management oversight work. Be transparent about policies under review or planned improvements.
2. Risk identification and prioritisation
Show how modern slavery risks are or will be assessed across operations and supply chains. Explain how the findings guide priorities and planned actions.
3. Due diligence and action
Outline steps taken to prevent, detect, and address modern slavery risks in operations and supply chains. Where due diligence processes are still developing, set out clear next steps and timelines for strengthening them.
4. Monitoring, evaluation, and learning
Demonstrate how the effectiveness of actions is assessed. Even if measurement is evolving, explain how progress will be tracked and learning embedded.
Over time, as programmes mature, companies should aim to build towards Level 2 (best practice). This will require more in-depth information to evidence a comprehensive understanding and prioritising of risks and clear evidence of impact, progress and lessons learned, including:
- information on direct and indirect suppliers, prioritising high-risk supply chains, going beyond Tier 1 and including details on subcontracting chains, recruitment procedures and source countries.
- case studies that illustrate the prevention and mitigation of risks in Tier 1 suppliers and beyond
- detailed information on purchasing practices, supplier policies & practices, and training of suppliers
- a full list of modern slavery risks identified
- in-depth information on remediation processes, cases and any consultation required in developing remediation
- details of worker engagement to measure impact
Organisations that are transparent about their starting point and clear about their improvement plans will meet the spirit and substance of the guidance.
GoodCorporation supports Modern Slavery Act compliance and reporting
GoodCorporation has supported organisations in identifying and managing human rights risks and impacts for over 25 years. Our approach is grounded in international standards and informed by evolving regulatory expectations. We provide practical support across the full due diligence cycle, from mapping salient risks and conducting impact assessments, to engaging stakeholders, delivering training and supporting implementation and improvement.
To strengthen Modern Slavery Statements and support Section 54 compliance, GoodCorporation helps organisations to:
- evaluate their modern slavery programmes against good and best practice
- identify gaps and prioritise practical improvements
- strengthen governance, risk assessment, due diligence and remediation processes, and
- produce clear, credible and transparent metrics that can be used to comply with reporting obligations and emerging regulatory standards
With expectations for Section 54 reporting on the rise, organisations need confidence that their approach is robust, proportionate and capable of demonstrating progress over time.
Explore our human rights and modern slavery services to learn more or contact us to understand where your statement stands, identify practical improvements, and ensure your reporting reflects good or best practice.
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