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Report

20 Jul 2017

Author:
Shareholder Association for Research & Education (SHARE)

The rise of supply chain transparency legislation: What is at stake for Canadian investors?

Canadian investors could benefit from the adoption of a supply chain due diligence reporting legislation at home and should take the lead in pushing for the eradication of forced labour...

This report reviews the California Transparency in Supply Chains Act, the US Trade Facilitation and Trade Enforcement Act, UK Modern Slavery Act, the French Due Diligence law, EU Directive 2014/95 and other legislative initiatives in the US, Switzerland and Australia. While these initiatives vary in their operation and goal, they coalesce around a movement to mandatory reporting by corporations of their due diligence process to ensure forced labour and related labour rights abuses do not occur in their supply chains and business activities. To date Canada has not required such reporting domestically; however, some Canadian companies are already captured by the reporting requirements in other jurisdictions.

In a global investment market where Canadian companies are compared to their international peers, and investors increasingly look for environmental, social and governance data with which to make investment decisions, domestically legislated supply chain disclosure would help both Canadian investors and Canadian companies keep pace with their global competitors. A Canadian supply chain reporting regime that is both useful to investors and effective in addressing forced labour and related abuses should [amongst others] require reporting to be updated annually;...require reports to be signed-off by top company official;... and include mechanisms to ensure compliance...