FTSE 100 At the Starting Line - An analysis of company statements under the UK Modern Slavery Act
An analysis of company statements under the UK Modern Slavery Act
The FTSE 100 companies who have reported under the Modern Slavery Act so far were scored on their action to eliminate slavery from their operations and supply chains and the extent of their disclosure under the Act. The 27 companies were put into ten tiers (tier one the best performing, ten the worst performing). The Resource Centre also recorded whether companies had met the minimum legal requirements.
The majority of company statements demonstrate weak risk assessment and due diligence. Most of the 27 FTSE100 companies that have reported so far are missing the opportunity to provide much needed leadership to eradicate forced labour from business operations and supply chains. Analysis showed most companies provide too little information on the structure and complexity of their supply chains. Even fewer identify specific slavery risks, both with regard to the type of risk and where in the supply chain the risk was identified (sector or location). Without this crucial first step of understanding their own operations and supply chains, companies are unlikely to be able to take significant action on slavery.
- The next tranche of FTSE100 companies are due to report in December 2016. They should seek to leap-frog the majority laggards in this report to demonstrate rigorous efforts to eliminate slavery, and provide the leadership expected of the largest companies.
- UK Government should publish a list of the companies required to produce statements under the Act; support open free accessible information regarding company compliance; and take measures to enforce the obligations of the Act and promote their reporting guidelines.
- UK Government should work with governments in the European Union, USA, Canada, and emerging markets to create common legislation internationally to drive due diligence and access to remedy.
- Advisors, lawyers and consultants should promote a transparent, systemic and collaborative approach to eradication, and advise against a tick-box approach to reporting.
- Investors should reward companies that demonstrate due diligence to avoid slavery and provide remedy.