Investors have welcomed two separate initiatives this week on both sides of the Atlantic to combat slavery in corporate supply chains.
Firstly, UK Prime Minister David Cameron today announced a new measure, lobbied for by NGOs and investors, which will require companies with a turnover of £36m (€51m) or above to report on preventing slavery in their operations and supply chain.
The measure is one of the provisions in the new UK Modern Slavery Act that comes into force tomorrow (July 30). Karen Bradley, minister for modern slavery and organised crime, who introduced the Modern Slavery Act to parliament, included a measure on supply chain transparency after engagement with NGOs and investors, including Rathbone Investment Management, Hermes, CCLA and the Church Commissioners.
And Cameron said that, from October, companies in this bracket would be required to publish an annual slavery and human trafficking statement. He said: “This measure is one of the first of its kind in the world and it will be a huge step forward, introducing greater accountability on business for the condition of their supply chains.”
It comes as two US Congress members have this week tabled a bill, welcomed by US investors, around companies disclosing measures to prevent slavery in their supply chain.Democratic Congresswoman Carolyn Maloney and Republican Congressman Chris Smith this week introduced the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 in the House of Representatives.
Democrat Senator Richard Blumenthal will introduce a companion bill in the Senate shortly.
The bill requires public companies with over $100m in global gross receipts to publicly disclose any measures to prevent human trafficking, slavery and child labour in their supply chains as part of their annual reports to the Securities and Exchange Commission. It would amend the Securities Exchange Act of 1934.
The Interfaith Centre on Corporate Responsibility, a coalition of 300 investors with assets under management of over $100bn, Calvert Investments and Christian Brothers Investment Services (CBIS) welcomed the bill.
Julie Tanner, assistant director of Catholic responsible investing at CBIS, said: “The disclosures required by these bills will provide investors with the information necessary to adequately evaluate risks to their portfolios and potential impacts to shareholder value.”
The bill builds on California’s Transparency in Supply Chains Act, enacted in 2012, it includes a provision that businesses in the state bringing in more than $100m annually must report on their efforts to eliminate slavery and human trafficking for their supply chains.