Finance

Investors take aim at construction firms over modern slavery

A cohort of investors led by CCLA, the UK investment manager which oversees more than £12bn on behalf of charities and religious organisations, plans to extend an initiative to combat modern slavery to the construction and materials sector — more than a year after urging hospitality firms to tackle the issue across their supply chains.

Launched by CCLA in 2019, the Find It, Fix It, Prevent It campaign aims to increase the effectiveness of corporate action against modern slavery, which can include forced and compulsory labour and human trafficking.

Initially the programme has focused on the hospitality sector, with 16 investors — including Fidelity International, Schroders, M&G and Federated Hermes — driving engagement with more than a dozen of the largest UK-listed hospitality firms. The initiative is now backed by 56 investors managing assets in excess of £7tn.

READ Finance firms criticised over ‘worryingly’ low awareness of modern slavery

Since its launch, asset managers involved in the programme have engaged with companies including Compass Group, Domino’s Pizza Group, Greggs and JD Wetherspoon to identify modern slavery across their supply chains.

One company engaged with, InterContinental Hotels Group, is now working to address instances of forced labour identified in its operations in Oman, which was reported in its modern slavery statement. In the UK, large companies are required to report annually what actions they are taking to combat modern slavery across their supply chains.

Another hospitality group, which was part of the CCLA investor engagement programme, identified areas of concern and is being strongly encouraged to investigate.

CCLA now plans to broaden engagement activities to include companies in the materials and construction sector, which is reported to be the second highest risk sector for forced labour and employs around 7% of the global workforce.

Peter Hugh Smith, chief executive of CCLA, said: “We are encouraged that one hospitality group has found modern slavery, but it is our ambition that by this stage next year that the majority of companies with whom we engage will have found areas of concern following thorough investigations.

“As investors in these companies, it is our moral duty to press companies we invest in to do their utmost to ensure their workers, and workers in their supply chains, enjoy fair conditions free from all forms of modern slavery.”

READ Investors have a moral duty to stand against slavery

Approximately 25 million people are thought to be victims of modern slavery, according to CCLA.

Despite a lack of progress tackling the issue, most UK companies appear to be aware of the issue.

In an survey of leading UK brands conducted by Ashbridge Hult business school, 77% acknowledged that they thought it was likely modern slavery occurred in their supply chains.

Fiona Reynolds, CEO of the Principles for Responsible Investment, said: “The investment community has a key role to play in the fight against modern slavery. Investors have leverage over the companies that they invest in and they need to use it to encourage them to identify and eradicate modern slavery.

“We call upon more investors to support Find It, Fix It, Prevent It as it expands to focus on more sectors.”

To contact the author of this story with feedback or news, email David Ricketts

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