Social issues have traditionally been undervalued by responsible investors, given the difficulty of measuring their short-term financial impact.
Goal 8.7 of the UN Sustainable Development Goals calls for ‘immediate and effective measures to eradicate forced labour and end modern and human trafficking’. To support this goal, CCLA developed the Find it, Fix it, Prevent it collaborative engagement initiative.
While the true extent of modern slavery is hidden from view, it is estimated that there are 50 million modern-day slaves in the world. This is a key issue for law-enforcement. However, it also impacts the business and investment community.
In the UK, for instance, the Global Slavery Index estimates that we import goods worth an estimated $26.1 billion each year that, in all probability, used slave labour in their production. We believe that companies have an obligation to work to find, and then support the provision of remedy to, victims of modern slavery in their supply chain and direct operations.
To this end, the Find it, Fix it, Prevent it initiative has three work streams:
- Public policy: to promote a meaningful regulatory environment through work with the government and the Home Office.
- Corporate engagement: aiding companies in developing and implementing better processes for finding fixing and preventing modern slavery.
- Developing better data: working with data providers, non-governmental organisations and academia to develop better data.
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Governments and policy makers have a key role to play in developing the legal frameworks to facilitate effective corporate action on modern slavery. For this reason, Find it, Fix it, Prevent it seeks to coordinate engagement with UK and overseas policy makers to encourage regulation that works. Mandatory reporting on the efficacy of anti-slavery efforts is essential. Just as important is obligatory human rights due diligence by companies throughout their supply chains.
Our initial focus is on continuing to strengthen the UK’s Modern Slavery Act. In 2020 we joined the Home Office’s Transparency in the Supply Chain Modern Slavery Strategy Implementation Group. This is a key group of Stakeholders who meet with the Home Office regularly to discuss how they can assist in pushing for more effective action.
Our intention is to expand the reach of the programme overseas. The European Parliament has repeatedly underlined the need for stronger European requirements for companies to prevent human rights abuses and to provide remedy for victims. We are monitoring the situation on the continent and have begun the call for Mandatory Human Rights Due Diligence legislation in the UK.
Research into the modern slavery policies adopted by FTSE 100 constituent companies conducted by the Business and Human Rights Resource Centre in 2018 identified that the weakest element of corporate slavery and human trafficking statements is effectiveness; 35% of companies provide little or no disclosure in this area. Our own engagement work also illustrates a lack of tangible evidence that lives are being improved by the actions of large corporations.
The coalition’s engagement programme is circular and designed to be repeated annually. Last year we pleased that one of the 13 target hospitality companies, InterContinental Hotels Group, disclosed finding high-risk indicators of forced labour in their Oman operations for the first time. This is a significant development, and we attended the AGM to publicly congratulate the company on taking this leadership in their sector. Building on this, our engagement with the company has moved on to pushing the company on their approach to finding remedy to the affected individuals and encouraging them to repeat the process that identified the problem in other markets.
There is no definitive source of data, nor a suitable method available, to quantify or qualify the problem with any accuracy. A lack of readily available data is hindering the potential for investors to act.
Find It, Fix It, Prevent It is bringing together investors, academics and NGOs to develop better data points on modern slavery. We will lobby ‘ESG’ data providers to include indicators relating to modern slavery in their standard ratings products and work with the government on efforts to collect the data it needs.
Project partner, The University of Nottingham Rights Lab, will draw on the collaborative engagement outcomes as a case study. The work will facilitate academic research and publications into what is – and what is not – effective in corporate action on slavery.