The ESG Phenomenon: Institute, Human Rights Group Highlight Modern Slavery Challenge

Editorial Staff

22 October 2024

The and the international human rights group, Walk Free, have issued a new report, Modern Slavery & Remediation – An Investor’s Guide.

The 36-page paper, which examines how investors can aid the remediation of modern slavery, gives a number of examples.

There were 27.6 million people in forced labour in 2021, rising by 2.7 million from 2016; these people are mostly working in areas such as manufacturing, construction, agriculture and domestic work sectors.

The European Union, for example, has its EU Corporate Sustainability Due Diligence Directive – this requires all EU member states to to pass laws requiring companies to carry out due diligence for human rights. In addition, human rights due diligence legislation is in force in jurisdictions including France, Germany and Norway while the UK and Australia require businesses to disclose the steps they are taking to identify and address modern slavery risk.

The study showed that investors can require the firms they invest in to have grievance mechanisms and support companies to identify the human rights impact and their relationship to harm; during the remediation process, investors can advise companies about what they expect to provide satisfactory remedies and recommend ways of putting plans into action.

“Our 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,” Kate Turner, global head of responsible investment at First Sentier Investors, said.

“Remediation is a central part of human rights outcomes but is often not well understood. Investors are asking how they can use and extend their influence. This report will enhance understanding of the stages of remediation, with underlying drivers and explanatory case studies, as well as an exploration of the investor’s potential role alongside other actors in the process,” Sudip Hazra, director of the First Sentier MUFG Sustainable Investment Institute, added.

Rights violations
"Modern slavery is a violation of fundamental human rights and a serious criminal offence. Businesses, including investors, are increasingly expected to assess and address modern slavery risks and provide or enable remediation of modern slavery cases in their operations and investments. If they fail to do so, they can face growing legal, reputational and financial risks.

"Remediation can take many forms, but ultimately it aims to 'make good' the harm that has occurred via financial compensation or non-financial measures such as facilitating access to health, legal or psychological services, repatriation, and taking actions to prevent future terms," the report said.

The Institute was launched by First Sentier Investors and Mitsubishi UFJ Financial Group in 2021.