Investors are vital in enabling remedy for modern slavery to survivors
Businesses and investors have a responsibility to respect human rights, prevent modern slavery, and ensure appropriate remediation.
Investors play a crucial role in driving ethical business practices and ensuring companies respect human rights in their operations and supply chains.
New research by the First Sentier MUFG Sustainable Investment Institute and Walk Free, examines the role investors can play in providing or enabling remediation to workers who have experienced modern slavery. The Modern Slavery & Remediation – An Investor’s Guide report explores examples of remediation in practice.
“There is a growing awareness that no investment is immune from modern slavery risks. Yet, there’s limited understanding of how investors should address these risks, and the role they can play in providing or facilitating access to remedy to those who have experienced modern slavery,” Walk Free’s Director of Business and Human Rights Serena Grant said.
“Our report provides guidance on investors’ responsibilities under international legal frameworks and emerging national legislation, as well as the steps they can take at different stages of the remediation process.”
How are businesses connected to modern slavery?
Modern slavery affects every country and supply chain globally. According to the latest Global Estimates of Modern Slavery, approximately 50 million people live in modern slavery, with 28 million in forced labour.
High-risk sectors include manufacturing, construction, agriculture, and domestic work.
Investors play a crucial role in addressing these issues across their investment portfolios.
What is remediation?
Remediation encompasses various responses aimed at addressing the harm caused by modern slavery.
This can include financial compensation and non-financial measures such as access to health, legal, or psychological services.
The goal is to counteract or “make good” the harm done and prevent future human rights abuses.
The report outlines several remediation solutions investors can pursue before, during and after investee companies find modern slavery risks. Some of these include:
• Requiring investee companies to establish grievance mechanisms and assess their human rights impacts.
• Ensuring follow-up on remediation commitments made by investee companies.
• Advising investee companies to develop corrective action plans.
• Recommending the appointment of internal investigative teams for serious cases.
• Mandating the development of reporting and tracking systems for modern slavery incidents.
What are the risks of ignoring modern slavery?
Businesses that fail to address modern slavery risks face escalating legal, reputational, and financial repercussions.
The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) mandates that EU member states implement laws requiring certain companies to conduct human rights and environmental due diligence.
Additionally, human rights due diligence legislation is already in effect in countries such as France, Germany, and Norway, while the UK and Australia require businesses to report on steps they are taking to identify and address modern slavery risks.
“This report shows very clearly the range of remediation work that companies can undertake and the opportunity for investors to enable remediation and encourage best practice actions to provide redress and resolution for human rights impacts,” Global Head of Responsible Investment at First Sentier Investors Kate Turner said.
“Together, businesses and investors should increasingly seek to mitigate and prevent these impacts and provide or facilitate remedy where harm has occurred.”
