Third party risk management has entered a new phase in 2026 as disclosure requirements continue to expand across regions and industries. Organizations are now expected to publicly report on environmental practices human rights protections and climate related impacts that extend beyond their own operations and into their supply chains. As a result companies must collect reliable data from suppliers partners and other external relationships to meet growing regulatory expectations.
This shift makes it essential to refine third party risk programs so they deliver accurate timely and auditable information. Below is an overview of the major disclosure trends shaping compliance strategies in 2026 and what organizations should prioritize now.
Supply chain transparency and forced labor reporting
Over the past decade laws focused on forced labor and ethical sourcing have multiplied across multiple jurisdictions. These rules typically require organizations that meet certain revenue or operating thresholds to publish annual statements explaining how they identify prevent and address labor abuses within their operations and supply chains.
One of the most important features of these requirements is their extraterritorial reach. A company does not need to be headquartered in a specific country to fall under these rules. What matters is business activity such as sales turnover or supply chain presence within that market. Penalties for noncompliance have also increased making enforcement a real concern rather than a theoretical risk.
For compliance teams this means supplier engagement is no longer optional. Consistent questionnaires clear documentation and ongoing monitoring are critical to support credible disclosures.
Expanded sustainability reporting across value chains
In 2026 sustainability reporting expectations in major markets now go far beyond high level narratives. Large and mid sized organizations are required to assess both how sustainability issues affect their financial performance and how their activities impact the environment and society.
This approach significantly broadens the scope of third party risk management. Even companies that are not directly subject to reporting obligations may be asked to provide detailed data to customers who are. As a result sustainability reporting obligations now cascade throughout entire value chains including smaller suppliers and service providers.
Organizations selling products or services into regulated markets should pay close attention to financial thresholds that may trigger reporting duties regardless of headquarters location.
Mandatory due diligence for environmental and human rights risks
Another major development is the rise of mandatory due diligence laws focused on environmental and human rights impacts. These frameworks require organizations to formally identify assess mitigate and report on risks connected to their business relationships including suppliers and subcontractors.
What sets these requirements apart is their prescriptive nature. Companies must demonstrate specific due diligence actions rather than relying on broad policy statements. In some cases failure to conduct adequate due diligence can lead to financial penalties and civil liability if harm occurs that could have been prevented.
This raises the stakes for third party risk programs and reinforces the need for documented processes strong governance and cross functional collaboration.
Climate related disclosures and governance oversight
Climate disclosure requirements are also reshaping third party risk management in 2026. Many organizations are now required to explain how leadership oversees climate related risks and how those risks are identified assessed and managed across the business.
Some entities must also disclose greenhouse gas emissions and climate exposure across their value chains. Legal challenges and policy debates continue in some regions but the overall direction is clear. Climate risk is now viewed as a core business risk that must be managed with the same rigor as financial or operational threats.
Organizations that begin aligning their data collection and governance structures early will be better positioned to adapt as rules are finalized and enforced.
Preparing for compliance in 2026 and beyond
While the pace of change can feel overwhelming these developments present an opportunity for compliance leaders to strengthen their role within the organization. Third party due diligence now overlaps with procurement finance sustainability and information technology which creates opportunities to share resources and streamline processes.
Standardizing questionnaires reducing duplication and investing in centralized data management can improve efficiency while supporting accurate disclosures. Teams should also monitor regulatory developments closely since disclosure laws are expected to continue expanding.
Being proactive today will reduce risk tomorrow. Organizations that invest in robust third party risk management programs now will be better prepared to meet evolving disclosure requirements and build trust with regulators investors and stakeholders.
