Sustainability Flash Note: Forced Labor: Rising investor scrutiny as European regulations are reshaped

Research evidence excerpt

Sustainability Flash Note: Forced Labor: Rising investor scrutiny as European regulations are reshaped

Noemie de la Gorce, CFA AC Europe Equity Research

(44-20) 7134-4229 28 July 2026 J P M O R G A N

noemie.delagorce@jpmorgan.com

Figure 1: A new wave of forced labor regulation across major developed economies

Timeline of key global modern slavery and forced labor regulations

Source: J.P. Morgan

One ambition, diverging structures

To provide further insights for investors on how European regulations compare with

other regions, we take a closer look at five key regulations: the US UFLPA, the UK

Modern Slavery Act (including recently proposed enhancements), the EU Forced Labor

Regulation (EUFLR), Canada’s Bill C-35, and Australia’s Modern Slavery Act (along

with proposed reforms). While these frameworks share a common ambition to address

forced labor, they differ substantially in structure. Broadly, two main models emerge:

1. The border enforcement model, which focuses on prohibiting or restricting the

importation of goods made with forced labor, placing the compliance burden on

importers and customs authorities (US UFLPA and Canada’s Bill C-35. Canada also

has a separate Fighting Against Forced Labour and Child Labour in Supply Chains

Act in force since 2024, which falls into the second category below).

2. The corporate conduct model, which requires companies to undertake due

diligence and publish disclosures to demonstrate that their supply chains are free of

forced labor risks. The UK Modern Slavery Act and Australia’s existing framework

are primarily of this type, though both have recently proposed incorporating new

enforcement mechanisms. The EUFLR is a hybrid model: it operates as a product

ban, but its enforcement remains largely risk-based.