A failure to manage human rights issues in supply chains may pose significant risks to business, according to a group of leading UK asset managers.
The investor group, with a combined total of £940 billion in assets under management, has written to David Cameron to express their concerns.
The group of 21 asset managers, which includes household names Rathbones, Aviva, Alliance Trust and BNP Paribas, are backing the Government’s recent commitment to include proportionate supply chain reporting requirements in the Modern Slavery Bill.
The letter to the Prime Minister identifies the serious issues of human cost, incidences of forced labour, poor working conditions or other forms of bonded labour within supply chains, which can result in damage to brands and reputation, undermining the licence to operate.
Complex supply chains can leave businesses vulnerable to association with human rights abuses, which presents real moral and ethical concerns. Somewhat unsurprisingly, and considering the current trend in media reporting on the subject, UK companies finally appear to be waking up to the issue. In their letter, the asset managers explain that their combined experience of engaging with companies reveals they share these concerns.
The letter concludes that, strengthening the reporting requirements on transparency in supply chains would create value for many different stakeholders. Companies’ reputations would be enhanced, investors’ long-term returns safeguarded, and people transitioned out of forced labour and modern slavery.
It is difficult to gauge how many victims suffer at the hands of this cruel, global, underground trade. Yet, however large, most studies agree that the alarming figure far exceeds 25 million. Walk Free Foundation estimates 35.8 million people are subject to forced labour, poor working conditions and other forms of bonded labour. Their campaign to achieve a world where everyone can walk free can be joined here.
This week, in the House of Lords, the Second Reading of the Modern Slavery Bill saw an excellent debate in which 31 Peers spoke and many issues got a good airing. The briefing on transparency in supply chains was well received by the House with strong support coming from cross-benchers.
A shorter version of the investors letter was also published in the Telegraph.
View the Press Release here