First Sentier MUFG Sustainable Investment Institute publishes new report on remediation of modern slavery 

Monday, 21 October 2024: A new report, ‘Modern Slavery & Remediation – An Investor’s Guide’ researched and authored by the First Sentier MUFG Sustainable Investment Institute (the Institute) and the international human rights group, Walk Free, examines the role that investors can play in facilitating remediation of modern slavery, and explores examples of remediation in practice.

Forced labour and other forms of modern slavery are violations of fundamental human rights, as well as serious criminal offences.  The most recent Global Estimates of Modern Slavery found there were 27.6 million people in forced labour in 2021; an increase of 2.7 million people since 2016, mostly in services like manufacturing, construction, agriculture and domestic work sectors. 

Businesses that fail to address modern slavery risks face increasing legal, reputational and financial consequences. Some examples of the growing regulatory requirements include the European Union’s (EU) Corporate Sustainability Due Diligence Directive (CSDDD) requiring all EU member states to introduce laws that require certain companies to conduct human rights and environmental due diligence. In addition, human rights due diligence legislation is in force in jurisdictions including France, Germany and Norway while the UK and Australia require businesses to disclose the steps they are taking to identify and address modern slavery risk. 

The report outlines remedial actions investors can pursue before, during and after investee companies find cases of modern slavery, together with case studies of remedial action taken by companies and investors. These include: 

• prior to an incident being found: requiring investee companies to have grievance mechanisms and supporting investee companies to identify the human rights impact and their relationship to harm;   
• during the remediation process: advising companies of their expectations to provide satisfactory remedy, recommending investee companies develop corrective action plans and where serious cases are reported, suggesting the investee company appoints an internal investigative team; and
• following remediation: encouraging companies to review complaints and complaints handling, and to take measures to prevent similar harm from reoccurring in the future. 

Kate Turner, Global Head of Responsible Investment at First Sentier Investors commented: “Our report shows very clearly the range of remediation work that companies can undertake and the opportunity for investors to enable remediation and encourage best practice actions to provide redress and resolution for human rights impacts. Together, businesses and investors should increasingly seek to mitigate and prevent these impacts and provide or facilitate remedy where harm has occurred.”  

Sudip Hazra, Director of the First Sentier MUFG Sustainable Investment Institute said: “Remediation is a central part of human rights outcomes but is often not well understood. Investors are asking how they can use and extend their influence.  This report will enhance understanding of the stages of remediation, with underlying drivers and explanatory case studies, as well as an exploration of the investor’s potential role alongside other actors in the process.” 

Serena Grant, Director, Business and Human Rights of Walk Free, said: “With 50 million people estimated to be living in modern slavery, such harms impact every country and supply chain in the world. There is a growing awareness that no investment is immune from modern slavery risks. Yet, there is limited understanding of how investors should address these risks, and the role they can play in providing or facilitating access to remedy to those who have experienced modern slavery. Our report provides guidance on investors’ responsibilities under international legal frameworks and emerging national legislation, as well as the steps they can take at different stages of the remediation process.

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About First Sentier MUFG Sustainable Investment Institute

The First Sentier MUFG Sustainable Investment Institute is jointly supported by First Sentier Investors and Mitsubishi UFJ Trust and Banking Corporation, a consolidated subsidiary of MUFG. The institute aims to help increase awareness and encourage action on important but under researched and emerging ESG-related issues. It will publish research on topics that can advance sustainable investing. An external academic advisory board informs the institute’s research agenda and ensures its publications meet high standards of rigour.

About Walk Free

Walk Free is an international human rights group, working to accelerate the end of modern slavery in all its forms. Walk Free produces the Global Slavery Index and other world-leading research, which provides an evidence base for its advocacy and engagement with business, investors, governments and faith to drive better practices. Part of the Minderoo Foundation, Walk Free is headquartered in Perth, Western Australia with an international team.

https://www.walkfree.org/

About First Sentier Investors 

First Sentier Investors is a global asset management group providing high quality, differentiated and relevant investment capabilities to deliver exceptional investment performance for our clients. Today, across the First Sentier Investors Group, we manage US$151.5 billion* in assets across global and regional equities, cash and regional fixed income, infrastructure and property, and alternative credit.

We are home to investment teams and brands such as AlbaCore Capital Group, FSSA Investment Managers, Igneo Infrastructure Partners, RQI Investors, and Stewart Investors. All investment teams operate with discrete investment autonomy, according to their investment philosophies and based on responsible investment principles.  

Our organisation was acquired by Mitsubishi UFJ Trust and Banking Corporation, a wholly-owned subsidiary of Mitsubishi UFJ Financial Group, Inc in August 2019. We operate as a standalone global investment management business with offices across Europe, the Americas, and Asia Pacific.   

We are a globally Certified B Corporation and signatory to the UK Stewardship Code.  

*N.B. First Sentier Investors’ gross AUM, inclusive of associated strategic partnership with AlbaCore Capital Group, as of 30 June 2024.

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