UK companies need to do more to address modern slavery, as evidence grows of its extent

21 November 2024

More UK companies have found evidence of modern slavery in their operations or supply chains, according to an assessment undertaken for the second iteration of an investor-backed benchmark. This year, 30 of the 110 companies assessed in the CCLA Modern Slavery Benchmark either found evidence of modern slavery in their supply chains, or indicators that some sort of forced labour was taking place.

This is an improvement from last year, when only 25 companies disclosed finding modern slavery or its indicators, showing that companies are making greater efforts to uncover the abuse of workers. But they continue to underperform in rectifying the damage done to individuals when this abuse is revealed.

Peter Hugh Smith, CCLA Chief Executive, said:

Modern slavery is both endemic throughout the global economy and an abhorrent abuse of human rights. Businesses have an obligation to find, fix and prevent it and we should not judge them for exposing modern slavery, but on what they do to address it when they uncover it.

As an investor, we are determined to do all we can to stamp out modern slavery, including using our influence to bring investors together as well as engage directly with the companies in which we invest. We call on investors, companies and policymakers to do more to address this scourge.

Modern slavery encompasses several types of exploitation, including forced labour, human trafficking, servitude and forced marriage. Victims are controlled by debt bondage, threats, violence, deception and coercion.

An estimated 50 million people worldwide were living in modern slavery in 2021, according to the International Labour Organization (ILO).¹ Of these, 28 million were in forced labour and 22 million in forced marriage. The number of people in modern slavery is on the rise: in 2021, 10 million more people were in modern slavery compared with 2016 global estimates, the ILO says.

Forced labour can be found in UK companies’ supply chains and direct operations. In 2021, G20 countries imported US$468 billion worth of goods at risk of modern slavery, according to international human rights group Walk Free.² It cites electronics, garments and textiles, palm oil, solar panels, fish and cocoa as goods posing modern slavery risks. The ILO estimates that forced labour in the private sector generates US$236 billion in illegal profits per year, by 37% since 2014.³

Modern slavery also occurs in the UK. In 2023, 17,004 potential victims of modern slavery were identified in the UK.⁴ There are an estimated 122,000 people subject to modern slavery in the country.⁵

Applying scrutiny to improve performance

The benchmark is designed to help investors use their power and influence to engage with companies to encourage them to tackle modern slavery. By providing comparisons over time, it shows where there has been progress and highlights areas where more work is needed. It provides an accountability mechanism, enabling investors and other stakeholders to assess whether companies are effectively managing the impacts on people’s lives from modern slavery, the associated business risks, and whether they appropriately supporting the individuals affected.

In the year since CCLA published the first benchmark, overall performance has improved. The average score this year was 36 out of a potential 62 points – up 6.5% compared with last year. Among sectors, consumer staples and financials saw the biggest increases.

The assessment assigns companies to one of five tiers. Twelve companies are identified as ‘leaders in human rights’, in the top tier of the benchmark: Associated British Foods, Aviva, British American Tobacco, Imperial Brands, J Sainsbury, Kingfisher, Marks & Spencer Group, Next, Reckitt Benckiser Group, Rio Tinto, Tesco and Unilever. Six of these have improved their performance since 2023, and Aviva has moved up two tiers in the benchmark.

Firza Sofya Safira, Aviva’s Sustainable Business Lead, said:

At Aviva, we are committed to upholding human rights as outlined by the United Nations Guiding Principles (UNGPs) and we know modern slavery, particularly forced labour, is one of our salient human rights issues. We view forced labour as an ongoing risk and are dedicated to raising awareness among our suppliers, conducting due diligence to identify and prevent instances of forced labour, sharing our learning and using our influence to provide remedies.

Retailer Sainsbury’s is also in the highest tier in the benchmark. It stresses the importance of transparency in helping to ensure trust with its customers, and of cross-industry collaboration to address modern slavery risks.

Andy Hickman, Head of Human Rights at Sainsbury’s, said:

Sainsbury’s sees transparency as critical to being a trusted retailer. This year, we took a significant step to be more open about how we manage human rights allegations. As well as being the right thing to do, Sainsbury’s believes it’s important to show customers, suppliers and shareholders how risks are being managed and to support wider collaborative action.

Collaboration across the industry is central to Sainsbury’s approach to addressing systemic labour abuses and human rights risks. In addition to our core sourcing requirements, we co-fund and participate in programmes aiming to drive industry-wide improvement in some of our key supply chains such as bananas, fresh produce, garments, seafood and tea.

However, the part of the assessment which scores how companies are addressing the impacts of modern slavery on the people involved saw the lowest marks, with an average of just 1.6 marks out of 8. Mitigating the harm caused by modern slavery involves rectifying the damage done to individuals, for example by providing compensation, access to health, legal or social services, and repatriation. This is an area of significant concern to CCLA and other investors.

Dr Martin Buttle, Better Work Lead at CCLA, said:

As investors, our expectation of business is that they find, fix and prevent modern slavery. In other words, we expect them to be undertaking human rights due diligence, disclosing their salient risks and, when they identify cases of modern slavery in their operations or supply chains, they provide appropriate redress to the individuals affected. This is very much in line with international regulatory expectations. As the benchmark shows and recent cases in the news demonstrate, companies have more to do when it comes to providing remedy to the victims of modern slavery.

A role for investors and policymakers

CCLA believes that it is incumbent on investors to engage to address modern slavery risks in their portfolios – and the Modern Slavery Benchmark provides a tool for them to do so.

As part of its work on modern slavery, CCLA founded in 2019 the Find it, Fix it, Prevent it investor coalition to bring together investors, academics and non-governmental organisations to share knowledge, set targets and monitor the progress of addressing modern slavery in businesses’ supply chains. The coalition is now backed by 69 global investors representing £15 trillion in assets under management.

CCLA has also committed to engage with companies performing most poorly in the benchmark in which it holds equity to encourage them to improve their performance.

The report setting out the results of the assessment also calls for the UK to update its modern slavery legislation.

Dame Sara Thornton, Consultant Modern Slavery for CCLA, said:

The transparency in supply chains provision of the Modern Slavery Act 2015 was genuinely world leading. But the UK has fallen behind as countries across the globe have introduced due diligence legislation or import bans for goods made with forced labour. The government needs to legislate to raise UK standards. Transparency rules need to be tougher and enforced, and mandatory due diligence and import bans should be introduced in line with our neighbours in the European Union.