Slavery Remains Painful Issue
Forced labour, debt bondage, forced marriage, slavery and slavery-like practices, human trafficking, and the worst forms of child labour remain painful issues for the world, say AllianceBernstein's Michelle Dunstan, chief responsibility officer, and Saskia Kort-Chick, a senior vice-president and director of ESG (environmental, social, and governance) research and engagement for responsible investing, in an ‘AB IQ.’ These covert activities are enabled by crime and corruption and they’re a problem in the developed world as well as emerging countries. Even a trip to the local grocery store can expose unaware consumers to modern slavery through an action as innocent as purchasing seafood, which may have been gathered by fishers who spend an inordinate time at sea under inhumane conditions. Because it’s so insidious and difficult to root out, modern slavery is a growing challenge for businesses across industries. “That makes it a global issue for the investors who channel capital to companies through their investment processes ‒ an issue that demands concrete actions,” they say. Reporting on modern slavery risks isn’t enough; investors should strive to reduce them through in-depth company research and active engagement with management teams. Direct dialogue with global supply-chain managers at companies that are current or potential investments offers a path to enhancing fundamental research and encouraging firms to evaluate modern slavery risks, including brand and reputation, litigation, employee strikes and supply-chain interruptions, and customer boycotts that may hurt financial performance. Near term, as investors continue to evaluate modern slavery risk in their portfolios and engage with companies, there should be an intense focus on expanding their knowledge bases and enhancing analytical capabilities as a path to more informed investment decisions and better reporting. Over a longer time frame, scrutiny of modern slavery is likely to intensify, with the world becoming more aware and increasingly driven to action. “In fact, we believe that modern slavery could become a moral issue as galvanizing as climate change,” say Dunstan and Kort-Chick.