UK Modern Slavery Act reporting requirements should cover financial portfolios, says Independent Anti-Slavery Commissioner

The UK’s Independent Anti-Slavery Commissioner has called on the government to strengthen the Modern Slavery Act to include a requirement that reporting covers financial portfolios.

Yesterday Dame Sara Thornton published a review of her engagement with financial services CEOs, which involved writing to 51 CEOs and asking what steps their organisations were taking to address modern slavery concerns in their businesses, supply chains, lending and investment portfolios. 

Out of the 51 CEOs she contacted, 44 responded, ranging from international banks to investment platforms, building societies and digital payment companies.

“While there were examples of good practice in the responses I had received, it was not the case that the financial services sector had integrated modern slavery risks across all its business processes in the same way it has approached environmental risk,” she wrote.

‘It was not the case that the financial services sector had integrated modern slavery risks across all its business processes in the same way it has approached environmental risk’ – Dame Sara Thornton, Independent Anti-Slavery Commissioner

The UK Modern Slavery Act came into force in 2015 and was the first legislation of its kind globally. It requires businesses with an annual turnover of £36m or more to  disclose each year what action they have taken to ensure there is no modern slavery in their business or supply chains. 

Yesterday’s review found that although almost all financial institutions confirmed that they were legally compliant, “not all linked their statements to a culture of continual improvement or internal engagement, and fewer still suggested that their statements addressed anti-slavery activities in their investing and lending portfolios.”

The review recommends that the UK government should strengthen the Modern Slavery Act to include the requirement that financial institutions reports on their investment and lending portfolios. 

Pending whether the suggested change in legislation occurs, Dame Thornton recommended that the financial sector voluntarily cover this area in its statements. “This would be a powerful driver towards greater transparency, particularly as most of the world’s multinational financial institutions have bases in London.”

“This would be a powerful driver towards greater transparency, particularly as most of the world’s multinational financial institutions have bases in London,” it said. 

Other recommendations touched on risk management and mitigation, systems for sharing, collective action, and collaboration on electronics supply chains. 

Moving forward, the review concluded: “It is encouraging to see so many financial institutions renewing or revitalising their commitments to the anti-slavery agenda. However, given the hidden nature of the crime, and the complexity of global supply chains, these initiatives are only scratching the surface of a pressing global problem.”

“Concerted action, focus and leadership will be essential for ensuring that anti-slavery considerations become an integral part of everyday business for all institutions, regardless of their subsector or size.”

Dame Thornton’s diagloue followed January's launch of Preventing Modern Slavery and Human Trafficking: an agenda for action across the financial sector, which found almost half of senior managers in the financial services sector were unaware of forced labour and exploitation in the UK.