Addressing modern slavery is becoming a business-critical issue - for credibility with customers, investors, NGOs and the public - according to new research by Hult International Business School and The Ethical Trading Initiative (ETI).
77% of companies think there is a likelihood of modern slavery occurring in their supply chains, up from 71% last year, and it is perceived to be more widespread – in particular in the UK, and at the farthest reaches of the supply chain.
The Modern Slavery Act 2015 requires large firms who have operations in the UK to report on their efforts to ensure there is no slavery, forced labour or trafficking in their business or supply chains. All companies with global annual revenues of £36m or more have to produce an annual modern slavery statement which must be approved by the board of directors, and signed by a director or equivalent.
Reputational risk, resulting from public exposure to worker abuse found in the supply chain or company operations, was the biggest driver for company action on modern slavery, cited by 97% of companies participating in the research. The factors which underpin a company’s reputation such as the views of customers, investors, staff and the risk of litigation, have all significantly increased as drivers for action over the last year.
The research found that engagement of senior leaders is seen by all companies as crucial in driving effective responses and overcoming critical challenges, and most companies have made modern slavery training and awareness-raising for senior leaders a priority. 79% of companies cited senior leadership passion and engagement as a key driver of their modern slavery response.
Modern slavery encompasses slavery, servitude, forced and compulsory labour, and human trafficking, and companies are increasingly scrutinising the practices of their recruitment and temporary or agency labour partners, among other key risk areas, as modern slavery is particularly prevalent where low-skilled, low-wage and seasonal labour are required.