Accelerating Change: The Potential of Capital Market Actors in Addressing Modern Slavery – World

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New Research Empowers Capital Market Actors to Address Modern Slavery

Providing a practical roadmap to better identify, prevent, mitigate, and remediate modern slavery.

New research published today offers a practical roadmap that Capital Market Actors can adopt to address modern slavery within their value chains – using their leverage and influence to tackle this human rights violation and end the suffering of an estimated 50 million people currently affected worldwide.

Accelerating Change: The Potential of Capital Market Actors in Addressing Modern Slavery, a collaborative effort between UNU-CPR’s Finance Against Slavery and Trafficking (FAST) initiative, the Bingham Centre for the Rule of Law, and the UK Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC), offers insights, best practice examples, case studies, and five actionable recommendations. The research was commissioned by the UK Foreign, Commonwealth and Development Office (FCDO).

The publication is being released at a time when the convergence of various factors – including the climate crisis, escalating conflicts, displacement of populations, and the disproportionate impact of COVID-19 on vulnerable communities – has left many desperate for employment or income-generating opportunities, thus placing them in risky situations vulnerable to exploitation.

There is a growing expectation that the financial sector should play a critical role in mitigation efforts. The illicit proceeds from modern slavery – for example the estimated $150 Billion generated by forced labour – flow through the global financial system. Capital Market Actors, which includes asset owners, asset managers, private equity funds, stock exchanges, investment banks, and development finance institutions, are uniquely positioned to identify, prevent, mitigate, and remediate modern slavery.

However, there has been a notable absence of comprehensive guidance on the role of Capital Market Actors in addressing modern slavery within their value chains. As the world aims to eliminate modern slavery by 2030 – ending this crime is the focus of Sustainable Development Goal 8.7 – the research will help to identify and mobilize the actions required to provide effective and sustainable solutions.

“Although the financial sector alone cannot address modern slavery, efforts to tackle this crime will not be successful unless the financial sector plays a more pivotal role,” argues Maha Khan, co-author of Accelerating Change and Financial Sector Lead for the FAST initiative. “Capital Market Actors in particular are hugely influential – but until now have not had clarity on both the scale of the modern slavery challenge and the steps they need to take to address this heinous crime which has worsened in recent years due to the climate crisis, ongoing conflicts, and the fallout from the COVID-19 pandemic.”

Accelerating Change reveals that modern slavery awareness is not uniformly integrated into Capital Market Actors‘ strategies due to a lack of understanding. It emphasizes the importance of senior-level commitment and board oversight for addressing social risks and argues that investors’ active engagement is a powerful lever to influence investee behavior. However, challenges persist, including the need for a better grasp of the ‘S’ in Environmental, Social, and Governance (ESG) reporting, concerns about data availability and reliability, and inconsistent approaches to governance.

The five actionable recommendations put forward to accelerate change are:

• Improve awareness and understanding of modern slavery risks and their relationship to ESG priorities.
• Develop dedicated social policies in alignment with international human rights and labour standards and principles.
• Incorporate Human Rights and Environmental Due Diligence processes throughout the investment life cycle.
• Increase collaborations with other Capital Market Actors to increase leverage, capitalizing on shared resources and building each other’s capabilities.
• Partner with modern slavery knowledge experts, civil society organizations, workers’ rights organizations, and survivors to obtain actionable data.

Taken together, these recommendations provide a strategic framework to not only mitigate modern slavery risks but also champion positive change in high-risk sectors.

“This research provides much needed evidence for investors and other financial actors to build their responses to modern slavery on, particularly addressing wider factors that underpin it, from poverty to the lack of decent work opportunities for communities vulnerable to exploitation,” said Jakub Sobik, Communications Director at the Modern Slavery PEC.

Download Accelerating Change: The Potential of Capital Market Actors in Addressing Modern Slavery here.

The views expressed in Accelerating Change and other outputs from this research project are those of the authors and not necessarily of the UK Foreign, Commonwealth and Development Office.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth

The article highlights the importance of addressing modern slavery within value chains, which is directly connected to SDG 8. This goal aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 8.7: Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child labor.

The article mentions that ending modern slavery is the focus of SDG 8.7. This target specifically addresses the eradication of forced labor, modern slavery, human trafficking, and the worst forms of child labor.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 8.7.1: Proportion and number of children aged 5-17 years engaged in child labor, by sex and age group (defined as a percentage of children in each age group).
• Indicator 8.7.2: Number of victims of human trafficking per 100,000 population, by sex, age group, and form of exploitation.

The article does not explicitly mention any indicators related to SDG 8.7. However, these two indicators are commonly used to measure progress towards eradicating forced labor, modern slavery, human trafficking, and child labor.

SDGs, Targets, and Indicators Table

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: reliefweb.int

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