Who should read this?
Senior executives, ESG & sustainability, procurement, risk management & compliance, responsible investing professionals, and suppliers to business and government.
How companies performed ..
Many large companies are now well into their second reporting cycle under the Australian Modern Slavery Act (Cth). Reviews of the first round of statements highlighted areas for improvement that should be front of mind for companies when preparing their next statement. In particular:
- greater supply chain engagement and education;
- strengthened due diligence processes for current and new suppliers;
- better visibility beyond Tier 1 suppliers;
- strengthened disclosures for corporate groups, including identifying where modern slavery risks vary between reporting entities and any owned or controlled entities;
- more detail on implementation of policies and risk assessments; and
- greater utilisation of the UN Guiding Principles on Business and Human Rights (UNGPs) to understand and communicate their potential involvement in modern slavery.
(Source: ACSI 2021; Monash University 2021)
Companies are likely to face increasing scrutiny in relation to the conditions in their supply chains, and stakeholders will be expecting to see year-on-year improvement from 2021 statements. With the Modern Slavery Act due for review in 2022, strengthening of legislative requirements could also be on the cards.
The complex nature of supply chains presents challenges for companies in implementing the recommended improvements. Read on to find out how givvable’s easy-to-use, digital solution can help you prepare your next Modern Slavery statement and report on your progress with confidence.
Australia is among a growing number of jurisdictions that have introduced or proposed legislation in relation to human rights due diligence and/or modern slavery reporting requirements (e.g., United Kingdom, France, Germany, California, the Netherlands, Canada and the European Union).
Australia’s Modern Slavery Act requires large businesses and other entities in the Australian market with annual consolidated revenue of at least A$100 million to prepare an annual Modern Slavery Statement.
The Statement must describe:
- the risks of modern slavery practices in the business’s operations and supply chains; and
- the actions taken by the business to assess and address those risks (including due diligence and remediation processes) and how it assesses the effectiveness of such actions.
Practices that are considered to constitute modern slavery include: human trafficking, slavery, servitude, forced labour, debt bondage, forced marriage and the worst forms of child labour (Australian Government: Home Affairs).
The impact of modern slavery
Modern slavery has a devastating human impact on its victims and disproportionately impacts women and girls (71 per cent of victims) and other vulnerable groups (including migrant workers). The Global Estimates of Modern Slavery found that, in 2016, 40.3 million people were victims of modern slavery; 24.9 million of those people were in the Asia-Pacific region; 16 million were in private sector supply chains and 15,000 were in Australia (ILO; Walk Free Foundation 2016).
Modern slavery can occur in any country, industry or sector and most businesses are likely to have modern slavery practices present somewhere in their operations or supply chains, posing significant reputation and legal risk – with implications for the business itself and its investors.
The social and economic impacts of the COVID-19 pandemic, including increasing demands on supply chains, have exacerbated the vulnerabilities that can lead to modern slavery.
Assessing and addressing human rights risks and impacts within a business’s operations and supply chain not only protects people, but it is good for business. Taking action to address modern slavery is important to long-term business sustainability (ACSI 2021) and can have a range of benefits including better quality supply chains, increased stakeholder confidence and access to financing opportunities (Australian Government: Home Affairs).
It also demonstrates businesses’ responsibility under the UNGPs and supports the achievement of a number of UN Sustainable Development Goals (for example, Goal 8: Decent work and economic growth, Goal 10: Reduced inequalities, Goal 16: Peace, justice and strong institutions), most directly Goal 8.7: taking immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, and by 2025 end child labour in all its forms.
Reviews of the first round of modern slavery statements (ACSI 2021; Monash University 2021) highlighted a number of opportunities for improvement, including:
- Greater collaboration, engagement and education of suppliers to address current, and mitigate future, modern slavery risks.
- Strengthened due diligence processes with better coverage of screening, selection and onboarding of new suppliers and review of existing suppliers.
- Broader understanding and disclosure of modern slavery risks beyond Tier 1 (direct) suppliers.
- Segmentation of suppliers and supply spend by country, region and category.
- More detail on the implementation of policies, risk assessments and training.
- Deeper disclosure of the organisation’s own operational risks.
- Strengthened disclosures for corporate groups, including identifying where modern slavery risks vary between reporting entities and any owned or controlled entities.
- Greater utilisation of the UNGPs to understand and communicate their potential involvement in modern slavery, using the ‘cause’, ‘contribute’ or ‘directly linked’ continuum.
- Strengthened grievance mechanisms.
Supply chains present a key area of challenge. The supply chains of large companies are often complex, span multiple jurisdictions and can involve hundreds, if not thousands, of suppliers with companies often lacking visibility beyond Tier 1 suppliers. ACSI’s review identified management and analysis of data used for modern slavery risk assessments as a key challenge for reporting companies and highlighted the potential role of technology in supporting better risk assessment processes (ACSI 2021).
These are challenges givvable can help to tackle.
givvable is smart technology helping businesses discover and track supplier sustainability credentials and attributes. The platform covers 1 million+ credentials over 500 local and global sources, such as certifications, accreditations, ratings and initiatives, which are mapped to:
- 12 ‘families’ of environmental, social and governance (ESG) themes and 192 ESG issues, drawn from leading sustainability reporting frameworks and industry standards, including
Global Reporting Initiative (GRI), Sustainability Accounting Standards (SASB) standards, which cover materiality for 77 different industries, ISO standards related to social procurement and sustainable development and World Bank and Bloomberg sustainability metrics
- givvable’s six widely-understood sustainability categories, which include
Ethical (being processes to demonstrate that products sourced are obtained in a responsible and sustainable way and workers are safe and treated fairly)
- 34 common sustainability objectives of corporates and governments
- relevant targets of the
17 Sustainable Development Goals (SDGs), which form part of the 2030 Agenda for Sustainable Development. A growing number of companies are integrating the SDGs into their sustainability reports and are communicating their alignment with, or contribution to, the SDGs
- a selection of events that promote sustainability and sustainable development both globally and in specific jurisdictions, including International Day for the Abolition of Slavery and World Day Against Child Labour
Supplier attributes to look for ...
There are credentials that directly support the protection of human rights and promote or require action to address and end modern slavery, such as human rights due diligence, ethical labour practices and employee grievance mechanisms.
Examples of credentials that indicate supplier practices or initiatives advancing measures to end modern slavery that are captured, or that suppliers may register, on givvable and users can track in the platform include:
Issuing Organisation: Rainforest Alliance (non-profit)
Coverage: Global
Category: Products
Description: Rainforest Alliance certification is a sign of environmental, economic and social sustainability and can be found on farm and forest products around the world.
To support sustainable livelihoods, the Rainforest Alliance Sustainable Agriculture Standard establishes requirements related to all fundamental human and labor rights, health and safety, and decent living and working conditions. These requirements align with the UN Guiding Principles (UNGPs) on Business and Human Rights, relevant ILO conventions, and other multi-stakeholder concepts. The certification program specifically promotes an assess-and-address, risk-based approach that focuses on prevention, engagement, improvement and incentivisation of farmers and companies to tackle human rights issues.
Issuing Organisation: Ethical Trading Initiative (non-profit)
Coverage: Global
Category: Organisation
Description: Ethical Trading Initiative – Full Members agree to demonstrate a clear commitment to ethical trade, to integrate ethical trade into their core business practices, and to tackle any issues that arise in the supply chain. Members commit to the ETI Base Code, which is an internationally recognised code of labour practice, and is derived from the Conventions of the ILO. Members report to ETI annually on their efforts and the results they are achieving at farm or factory level.
The ETI Base Code includes nine key standards with regards to labour practices and human rights: employment is freely chosen; freedom of association and right to collective bargaining are respected; working conditions are hygienic and safe; child labour shall not be used; living wages are paid; working hours are not excessive; no discrimination is practised; regular employment is provided and no harsh or inhumane treatment is allowed.
Members are also required to follow ETI’s principles of implementation and need to drive year-on-year improvements to working conditions and support their suppliers to improve working conditions, for example, through advice and training.
Issuing Organisation: United Nations Global Compact
Coverage: Global
Category: Organisation
Description: Global Compact LEAD is a group of highly engaged Participants of the UN Global Compact (UNGC) from across all regions and sectors working to advance corporate sustainability within their organisations and inspire others to do the same. Global Compact LEAD companies participate in at least two action platforms to demonstrate the company’s engagement with UNGC and submit an annual, advanced communication on progress towards implementing the UNGC’s Ten Principles into their strategies and operations, and support of broader UN goals and issues. The Ten Principles span four areas: human rights, labour, environment and anti-corruption, and include principles in relation to elimination of forced, compulsory and child labour and the protection of human rights.
Issuing Organisation: Australian Government
Coverage: Australia
Category: Organisation
Description: Under Australia’s Modern Slavery Act, large businesses and other entities in the Australian market with annual consolidated revenue of at least AUD$100 million are required to submit a Modern Slavery Statement annually. These statements must set out the reporting entity’s actions to assess and address modern slavery risks in their global operations and supply chains.
Issuing Organisation: Mekong Club (non-profit)
Coverage: Global (with Asia focus)
Category: Organisation
Description: Companies that sign up to the Business Pledge agree to commit, act, track and measure their anti-slavery efforts progressively. The Pledge focuses on ending modern slavery across Asia through collaboration and tangible action, and signatories commit to advocating a zero-tolerance approach to modern slavery in all its forms.
This is just a snapshot of some of the ethical sourcing credentials that we cover. givvable’s platform covers over 500 sustainability credentials that can help you find and track suppliers that can further your sustainability objectives.
Note: All information for credential descriptions has been sourced directly from the credential issuer’s website.
Pressure is mounting ...
There is growing momentum across the globe towards strengthening legislative requirements in relation to protection of human rights by businesses.
Amendments to the NSW Modern Slavery Act were passed earlier this month with the Act now due to commence in January 2022. The Act provides a range of protections, which are designed to safeguard people vulnerable to slavery (Mills Oakley 2021) and requires state-owned corporations to publish modern slavery statements.
The Australian Modern Slavery Act is due for review early next year and a recent Senate inquiry has called for the Act to be strengthened and broadened, so we may see a stricter regime introduced here in Australia.
The UK government is also considering strengthening its own Modern Slavery Act, including through the introduction of penalties for non-compliance.
The EU, which has the promotion of responsible and sustainable value chains as one of the pillars of its EU trade strategy, intends to introduce mandatory human rights and environmental supply chain due diligence requirements across all sectors for companies operating in or looking to access the EU market, with the European Commission expected to publish the new legislative proposal in 2022. These requirements will have implications for Australian businesses doing business in Europe.
Our solutions
givvable’s digital platform comprises three integrated modules:
- Search & engage: discover & engage new suppliers with credentials across the full range of sustainability categories. Unrivalled coverage of over 1 million+ credentials help you grow your network of verified suppliers wherever you operate in the world. Learn more >>
- Match & track: identify the credentials held by your suppliers and continuously track them. Drill down by credential, supplier, sustainability target, ESG theme and more. givvable’s platform provides data at the entity level (i.e., parent, subsidiary, related entity) so you can find out the unique local, regional or global credentials applicable to each individual supplier. Request a free sample >>
- Learn & grow: our supplier-friendly portal that enables self-registration and gives suppliers access to a range of tools & learning to support them on their sustainability journey. Head to Supplier Portal >>
For businesses preparing modern slavery statements, you can:
- Identify whether your current suppliers hold credentials that demonstrate commitment and action to protecting human rights and preventing modern slavery;
- Fast track your search for suppliers that help you meet your ethical sourcing goals and contribute to the protection of human rights; and
- Support engagement and education of your own suppliers by inviting them to register on givvable.
Your suppliers can then:
- Identify whether their suppliers hold ethical sourcing credentials, capturing lower tiers in your supply chain.
- Take our ethical sourcing module, a learning module created by our team of expert sustainability specialists to educate suppliers on buyer requirements related to modern slavery, ethical sourcing, equity and workplace health & safety.
- Suppliers also receive recommendations on credentials they may be eligible for.
givvable’s platform is purposely designed to be user-friendly – any user, irrespective of how much or how little they know about sustainability, is able to navigate and use the platform to search, engage and track suppliers that meet the business’s objectives.
Key takeaways
There is growing momentum across the globe towards strengthening legislative requirements for human rights due diligence and modern slavery reporting.
Many businesses will be exposed to these requirements, whether directly – or indirectly, as suppliers to companies directly responsible. We can expect to see a ‘trickle down’ effect across businesses' value chains due to their global nature.
Companies preparing their next Modern Slavery Statement should be looking at key improvement opportunities and taking action to better understand, assess and address potential modern slavery risks in their supply chains.
givvable’s smart technology can help businesses find and grow their network of verified suppliers with ethical sourcing credentials, identify and track credentials held by their current suppliers and enable businesses to engage with and educate their suppliers on the protection of human rights.
3 easy steps to mobilise ethical supply chains
1. Find and track suppliers with credentials linked to ESG themes including:
- protection of human rights
- ethical labour practices
2. Further your sustainability & ESG objectives, including:
- Health, safety & wellbeing
- Ethical sourcing
3. Find suppliers with credentials that advance SDG goals relevant to ethical labour practices and protection of human rights, including:
- SDG 8: Decent Work and Economic Growth
- SDG 10: Reduced inequalities
- SDG 12: Peace, Justice and Strong Institutions
The time to act is now.
Get started, head to www.givvable.com today!