According to the global slavery estimates published last September, there are just under 50 million people across the globe who are in slavery; 28 million of those are in forced labour, 22 million are in forced marriages. And it is happening in plain sight.
“It’s very easy for people to think that this is something that happens thousands of miles away and that it doesn’t happen in the UK. Well, I’m afraid it does,” says CCLA’s Modern Slavery Consultant, Dame Sara Thornton. “When we talk about modern slavery, we use it as an umbrella term. So it includes trafficking, slavery, domestic servitude, organ harvesting, sexual exploitation, forced criminality, and forced labour. It’s a very broad term but in all its forms, modern slavery it is about making money and exploiting vulnerable people. At its core it is an economic crime.”
A former UK Independent Anti-Slavery Commissioner and Chief Constable, Dame Sara has been engaging with anti-modern slavery initiatives from a law enforcement perspective for a lot of her career. She soon realised, however, that more focus needed to be placed on prevention. “This is where financial services can play an important role,” she says. “In fact, they are key to any effort to prevent modern slavery. The main area where they can play a part is by putting pressure on the businesses they lend to, or invest in, that might have links to slavery and trafficking. It’s about engaging with companies and encouraging them to do the right thing.”
Commitment to change
This realisation brought CCLA to Dame Sara’s attention. She met with chief executive Peter Hugh Smith and he offered insight into the work they were doing around investor engagement and modern slavery. Dame Sara explains: “I could see that CCLA not only had a keen interest in its own role in terms of its investments and how it could invest for good, but was also trying to bring other investors together to act jointly. And I believe very strongly that joint activity can be so much more powerful.”
CCLA has a long-standing commitment to human rights and its highest exposure to modern slavery is likely to be through the companies and assets held in client portfolios. Recognising the important role that investors can play to make change happen, CCLA created the Find it, Fix it, Prevent it initiative that aims to bring investors together to help improve the efficacy of corporate actions to find and fight modern slavery in their supply chains.
To date, this programme has received the support of investors with assets under management in excess of £12.8tn and has seen real improvements in corporate practices through its engagement strategies. “What I like about CCLA’s approach to fund management is that it is not about divestment at the first sign of trouble. It’s about building capacity to improve and, if you find that there are issues with slavery and trafficking, making sure you seek them out and address them.
“The fund managers at CCLA with whom the charities engage are in constant contact and communication with the sustainability team to ensure that they can answer any questions and be absolutely straight and clear that they are not only looking after the financial side of the investment, but also sustainability and value-alignment.”
Pillars of the programme
The Find it, Fix it, Prevent it initiative is built around three main pillars. “Probably the most significant is collaborative engagement,” says Dame Sara. “How can we, as investors, engage with the companies in which we hold equity to encourage them to address the issues of slavery and trafficking?”
The project’s first focus was on hospitality, which is a high-risk sector. CCLA is now also working with construction companies, and issues around seasonal workers across sectors. Dame Sara explains: “Investors are collaborating to engage with the companies, asking whether they have found evidence of slavery and trafficking. If not, can they show that they have looked hard enough? If they have found it, what have they done about it? How have they recompensed workers? What have they done to prevent it from happening again? So, it’s not simply about stopping it; it’s about putting right the harm that has been caused.”
The second aim of the initiative is around policy. The law in the UK as it stands is informed by the Modern Slavery Act, which requires businesses with a turnover of more than £36m a year to publish an annual modern slavery statement. “This is good as far as it goes,” says Dame Sara, “but reports and consultations suggest the law needs to be tougher and tightened up. For example, there should be civil penalties if you don’t fulfil reporting requirements; there should be a deadline for when you report; there should be certain categories of information you must include; and requirements should apply to the public sector as well as the private sector. I believe we need more of this kind of regulation to create a level playing field.”
The third area of the programme is around company ratings and data. “The information that rating agencies provide when it comes to the ‘S’ in environmental, social and governance (ESG) investing isn’t always helpful. It tends to rate controversy and downgrades companies that have reported issues around slavery and trafficking. One of the frustrations is that we are saying to companies that it is really important that if they find issues they report it, are transparent and open about it, and deal with it. But if a rating agency downgrades them as a result, where is the incentive?”
Data feeds into this because it doesn’t always give the complete picture of how a company is performing and can skew the quantitative information upon which decisions are made. “We are looking at past reporting in modern slavery statements, and working out what we might do to make it more meaningful. We’re talking to academics about the use of machine learning and AI so that we can rapidly ingest the information and pull out the key insights. Because we do need better data. At the end of the day, people need that numeric information in spreadsheets when they are making decisions.
“When you speak to survivors of slavery and trafficking, there is a huge amount of rich, qualitative information, which is very hard to capture in the quant systems that investors and businesses tend to use. That makes it hard to ensure the survivors’ voices, those with lived experience, are being heard.”
An interview with Dame Sara Thornton modern slavery consultant at CCLA.
Fast facts
No. 1 investment manager of UK charities*
£13bn+ in assets under management**
60+ years of ESG investing
£15tn+ of assets supporting CCLA initiatives in mental health, modern slavery and climate change
160+ diverse team of staff across the UK
Early signatory (2007) to Principles for Responsible Investment (PRI)
5* rated by PRI for listed equities
*Charity Finance Fund Management Survey 2022
**CCLA: Internal as at 31 December 2022
What we do
CCLA is the UK’s largest charity investment manager. Firmly believing that healthy financial markets depend on healthy communities, CCLA has a long track-record of instigating change for a better world with its pioneering work on climate, modern slavery and mental health. Founded in 1958, CCLA is independently owned by its clients and staff with £13bn of assets under management as at 31 December 2022.
