Modern slavery is a widespread, criminal activity which has a significant economic impact globally. It is estimated to be a $150 billion trade which involves approximately 50 million people facing a form of modern slavery and human trafficking globally, including 28 million in forced labour. The exploitation of people through forced labour and sexual slavery has been fuelled by a growing number of global migrants in search of prosperity, more complex supply chains (brought about by globalisation) and weak enforcement by regulators.

We believe that businesses have a key role to play in tackling this issue by making their own supply chains more robust. To do so is in the interests of investors as they may suffer significant brand and reputational damage if human trafficking is found in their business and no effort has been made by the company to provide remediation. Given the systemic nature of modern slavery and the serious risk it poses to businesses and investors, we expect all UK businesses covered by the Act to meet the reporting requirements of the Modern Slavery Act.

The 2015 Modern Slavery Act was a landmark piece of legislation, requiring all companies over  a certain size operating in the UK to report in detail on their approach to finding and eliminating modern slavery within their supply chains. The quality of reporting delivered under Section 54 of the Act can act as an important marker for how seriously senior management are taking this risk. It improves accountability and enables companies to identify the areas of their business most at risk. Companies which meet the reporting requirements and clearly disclose the areas of their businesses most susceptible to modern slavery benefit from increased investor confidence. Conversely, non-compliance with the Modern Slavery Act poses as a serious risk to long-term investors and questions the suitability of investing in such companies.

The Votes Against Slavery project is focused narrowly on disclosure. It should be seen as complementary to work conducted under a different investor collation called ‘Find it, Fix it, Prevent it’, which is encouraging companies to discover modern slavery within their supply chains and to provide the appropriate care and remedy. CCLA and Rathbones are mutually supportive of each other’s efforts. Rathbones have been pleased to accept a position on the supervisory board of ““Find it, Fix it, Prevent It”, and CCLA are a key stakeholder in the “Votes Against Slavery” project.

As well as continuing our engagement with the FTSE 350, we will be expanding the project to cover the full FTSE AIM listing. We expect the members of the FTSE 350 and FTSE AIM to be leading in this area, and to take substantial action to address the prevalence of slavery within their supply chains.

Given that there are multiple forms of non-compliance in the target list, we will be sending adapted versions of the attached letters which will be tweaked depending on the different area of non-compliance. For instance, the list of non-compliant FTSE 350 companies will require ten versions of the attached letter, whereas the FTSE AIM list will need 15 different versions. FTSE 350 Investment companies will receive a slightly toned down letter, which commends them for creating a statement but encouraging them to adopt full compliance.