One of the UK’s biggest charity fund managers, CCLA, has teamed up with a UN-backed investor group and the UK’s Investment Association to launch an initiative aimed at stamping out slavery from companies’ supply chains.
CCLA argues that virtually every company in the UK has connections to slavery somewhere in its operations, with more than $18bn (£14bn) of goods produced from forced labour imported into Britain every year.
Even though the UK’s Modern Slavery Act came into force in 2015, few companies have made significant progress on the issue, warns CCLA, which manages £10bn of investments for charities, the Church of England and local authorities.
Its three-year initiative, called “Find it, fix it, prevent it”, is backed by Principles for Responsible Investment (PRI), a UN-supported international network of investors, and Rathbone Investment Management. It will use the clout of investors to encourage UK businesses to find and help victims of slavery within their operations and supply chain. A progress report will be published every year.
Globally, around 25 million people are living in a state of forced labour, in servitude or having been trafficked, according to UN estimates. Around 130,000 are estimated to be living in the UK, working in agriculture, construction and other areas.
Last week, CCLA convened 27 fund managers, including M&G Investments and members of the Church Investors Group, to discuss the issue. CCLA is calling on the UK’s investment industry to pressure businesses to develop better policies and procedures for identifying and tackling modern slavery. It is also urging the government to force firms to improve their reporting on the issue.
Peter Hugh Smith, CCLA’s chief executive, said the fund managers were “shocked” when presented with the figures and findings on how mainstream slavery had become. He believes shareholders should be asking questions about slavery in much the same way they are scrutinising companies’ policies in relation to climate change. The initiative will initially target 25 hospitality companies such as restaurants and hotels.
He said consumers must also play their part and be vigilant, for example “when they get their car washed or when they go to a nail bar – these are areas where slavery happens in this country”.
The Modern Slavery Act requires UK companies of a certain size to report annually on what action they have taken in their operations and in supply chains. Last year only a cluster of FTSE 100 companies stood out with their reporting, and the average score was 31%, according to the Business and Human Rights Resource Centre.
Chris Cummings, chief executive of the Investment Association, said: “The investment management industry has the power to shine a light on companies and improve their practices. As investors, we want to invest in well-run companies and we welcome this new initiative, which aims to stamp out slavery and support its victims.”
The programme will be overseen by an advisory committee chaired by Hugh Smith that includes representatives from the association, PRI, the Business and Human Rights Resource Centre and the University of Nottingham’s Rights Lab.