The Modern Slavery Act reporting requirements for most Australian companies are now in place, and Martin Currie Australia (MCA) have been working closely on the topic of exploitation with the companies in our Australian investment universe.
At Martin Currie, we have long recognised the risks presented by Modern Slavery and human rights breaches and that the approach companies take here is a good indication of a company’s overarching culture and policies around other Social and Governance issues.
As part of our evaluation of companies for investment, we have ongoing engagements with company management and boards on a range of ESG issues, and Modern Slavery has become a particular focus in our discussions over the last few years. This recognises that the approach companies take to Modern Slavery risk is also a good indication of a company’s overarching culture and policies around other Social and Governance issues such as underpayment of workers and substandard working conditions.
The new Australian Act has provided Australian equity investors like us with an opportunity to derive additional insight across supply chains and supply chain risk management across Australian corporates. As a firm, we have recently initiated a focussed project to:
- identify risk factors and behaviours that may indicate if a company has a material risk of aspects of Modern Slavery,
- rate each company in terms of that risk,
- create a ‘best practice framework’ for addressing Modern Slavery risk, and
- engage with company management to push for positive change where policy and action is deficient versus best practice.
In the following article, Chris Schade, Research Analyst and Will Baylis, Portfolio Manager for MCA discuss how the investment team have delved deeply into each company’s Modern Slavery policies, reviewed the actual actions a company is taking to mitigate the risk, and work to share best practices and create ongoing dialogue.
Our ongoing engagement with companies to ensure they are working towards best practice in reducing Modern Slavery risk in their supply chains is very important.