Can Scope Make a Difference? Assessing the Reach of Due Diligence Laws in Supply Networks

ABSTRACT Human rights and environmental due diligence (HREDD) laws seek to make companies legally accountable for adverse social and environmental impacts across their supply chains. Although jurisdictionally bounded, these laws rest on the assumption that their influence can extend globally through supply networks. This study assesses the reach of mandatory HREDD in the apparel industry using social network analysis on almost 50,000 buyer–supplier relationships. Although fewer than 40% of buyers are directly regulated, their obligations extend to around two‐thirds of suppliers, suggesting substantial indirect (vertical) reach. Shared suppliers further create potential pathways for the diffusion of due diligence norms and practices to unregulated buyers. However, the predominance of weakly connected suppliers and out‐of‐scope, yet structurally central, buyers limits opportunities for diffusion toward the network periphery. This research contributes to the debate on supply chain governance by showing that network structure can be a critical, yet often overlooked, factor for the effectiveness of transnational due diligence regulation.