- Third successive ‘Votes Against Slavery’ engagement
- Investors with a combined £9.6 trillion assets under management join the engagement
Rathbones has launched its third Votes Against Slavery engagement, securing support from 122 investors with assets under management totalling £9.6 trillion.
The engagement, led by the Rathbones stewardship team and co-ordinated through the PRI Collaboration Platform, includes 29 asset managers and institutional investors, including pension funds, and targets FTSE 350 companies which fail to comply with Section 54 of the Modern Slavery Act (2015).
Modern slavery has a significant human and economic impact globally. It is estimated to be a $150 billion trade which involves approximately 40.3 million people in some form of slavery including forced labour, the sale and trafficking of people, forced and servile marriage and the exploitation of children.
The Modern Slavery Act (2015) requires all companies above a certain size operating in the UK to report in detail on how they find and eliminate modern slavery within their supply chains. But despite the legal requirement to do so, there is currently no legal redress for companies that fail to comply.
As a result of previous engagements through Rathbones, the 61 FTSE 350 companies targeted in 2021 became compliant by January 2022, and 20 out of 22 FTSE 100 companies contacted in 2020 became compliant by the end of that year.
For the 2022 engagement, Rathbones, on behalf of the group of investors, has contacted 43 FTSE 350 companies which have fallen short of the reporting requirements.
Archie Pearson, ESG and voting analyst, said: “The quality of reporting delivered under Section 54 of the Act serves as an important signal for how seriously senior management take this risk. Failure to comply can range from statements missing clear board approval to a failure by a company to update its statement on an annual basis, or not achieving director sign-off. The moral imperative is unquestionable, and companies which meet the reporting requirements, clearly disclosing the areas of their businesses most susceptible to modern slavery, benefit from increased investor confidence. So far, we have been very pleased with the level of response that we have received in this engagement. But as it stands, there’s still no formal consequence for those companies that don’t comply.”
Independent Anti-Slavery Commissioner, Dame Sara Thornton DBE QPM said: “The continuing expansion of the Votes Against Slavery coalition demonstrates a growing appetite from the investment community to raise ethical standards and hold businesses to account. The Modern Slavery Act (2015) in its current form sets a very low bar for business. It is concerning that the coalition has found such high levels of non-compliance in its third year of engagement with FTSE companies.
“As we await the implementation of new legislation to strengthen the Act, voluntary initiatives such as Votes Against Slavery will be essential for driving more responsible business behaviour. Over the longer term, I hope such activities can evolve to encourage companies to move beyond compliance towards a culture of continuous improvement.”
Matt Crossman, stewardship director, Rathbones said: “UK businesses have a critical role to play in tackling modern slavery and as long-term investors, we believe it is fundamental that companies comply with all provisions of the Act.
“It’s fair to say that while we’ve been pleased by the success of our previous engagements, we realise that there’s so much more to be done and will continue to tackle this issue. Modern slavery and human trafficking are still endemic globally. And with the current geopolitical situation, supply chain disruption and refugee movement clearly increase the risks of exploitation, a sickening phenomenon we witnessed in the pandemic.
“Additionally, the UK Government ran a public consultation into the Modern Slavery Act which concluded in 2019. The recommendations from this consultation have not yet been implemented, some 29 months later. Corporate transparency efforts like Section 54 require oversight from Government if investees are to take them seriously. Our work has shown that the reporting requirements are not yet delivering all the positive change in UK corporate practice that they could; we believe the potential to do so is huge. Implementing the findings of its own review would be a very welcome move as it would raise the bar on corporate supply chain transparency even higher.”
Matt Crossman
Stewardship Director
Archie Pearson
ESG and Voting Analyst
For further information, please contact:
Madhu Kalia, Rathbones 020 7399 0256/07825 596302
Sam Emery/Emma Murphy, Quill PR 020 7466 5050
Jessica Roberts
Independent Anti-Slavery Commissioner's Office 07765 444 387
jessica.roberts6@iasc.independent.gov.uk
The information contained in this note is for use by investment advisers and journalists and must not be circulated to private clients or to the general public.
Notes to editors:
If you wish to see a list of the participating investors in the 2022 Votes Against Slavery engagement, please do get in touch.
PRI Collaboration Platform
The Collaboration Platform is a unique form that allows investors to pool resources, share information and enhance their influence on ESG issues. It is also a hub for academics and investors to connect and engage with research. Posts include invitations to sign join letters to companies and join investor-company engagements, proposals for research, calls to foster dialogue with policy makers and requests for support on upcoming shareholder resolutions.
For further information, please see: https://collaborate.unpri.org/
Previous Votes Against Slavery engagements
2021
Rathbones welcomed 97 investors with £7.8 trillion assets under management to the coalition in 2021. Of 61 companies in the FTSE350 identified as non-complaint, as at 13th December 2021 59 companies (97%) had become compliant as a direct result of the engagement. The remaining two companies became compliant in January 2022. The report for the 2021 engagement can be found HERE.
2020
In 2020, 20 investors supported with £3.2 trillion assets under management. As a result of the engagement, 20 out of 22 companies contacted (90%) were compliant as at 31 December 2020.
The Votes Against Slavery project, with its focus on disclosure should be seen as complementary to work conducted under a different investor coalition led by CCLA called “Find it, Fix it, Prevent it”, which encourages companies to discover modern slavery within their supply chains and to provide the appropriate care and remedy.
CCLA and Rathbones are mutually supportive of each other’s efforts. Rathbones has been pleased to accept a position on the supervisory board of “Find it, Fix it, Prevent It”, and CCLA is a key stakeholder in the “Votes Against Slavery” project.
The report for the 2020 engagement can be found HERE.
Matt Crossman, stewardship director, Rathbones
Matt is the stewardship director for the group. Overseeing the work of the Stewardship Committee, he ensures active voting at company AGMs, whilst also being the group lead on the integration of Environmental, Social and Governance (ESG) factors into the investment process. He also leads thematic engagement with companies on ESG issues, especially that undertaken via the UN-backed Principles for Responsible Investment.
He is a graduate of the University of Bristol where he studied law, with a particular interest in the administration of environmental law, and also has post-graduate qualifications in Sustainable Development theory and practice. He is a trustee of LoveBristol, and urban regeneration charity, and served on the board of the Ecumenical Council for Corporate Responsibility between 2007 and 2012.
Archie Pearson, ESG and voting analyst, Rathbones
Archie joined Rathbones in 2018 as a voting and governance analyst. He supports Matt Crossman, on the stewardship team, ensuring informed proxy voting and corporate engagement activities as part of Rathbones’ stewardship policies, and helping to promote the integration of ESG within the investment process.
Prior to Rathbones, Archie worked for Oikocredit in their UK and Ireland offices. During his time there, he worked as a client executive, tasked with generating capital from individuals and institutions.
Archie graduated in 2015 from the University of Edinburgh with a Masters in Theology.
Independent Anti-Slavery Commissioner
Part 4 of the Modern Slavery Act 2015 created the role of the Independent Anti-Slavery Commissioner. The Commissioner has a UK-wide remit to encourage good practice in the prevention, detection, investigation and prosecution of slavery and human trafficking offences and the identification of victims.
The Commissioner is given an annual budget with which to appoint staff and carry out her duties. She is accountable through her strategic plan and annual reports, which the Secretary of State lays before Parliament, setting out the extent to which objectives and priorities are achieved. Her Strategic Plan 2019 – 2021 was launched in October 2019 and her Annual Report 2020 – 2021 was launched in September 2020.
Dame Sara Thornton was appointed as the Independent Anti-Slavery Commissioner by the Secretary of State following consultation with the Scottish Ministers and the Department of Justice in Northern Ireland. She took up post at the beginning of May 2019 and her appointment is for three years.
About Rathbones:
Rathbones Group Plc (Rathbones), through its subsidiaries, is one of the UK’s leading providers of investment management services for individuals, charities and professional advisers. This includes discretionary investment management, unit trusts, tax planning, trust and company management, financial advice and banking services. Rathbones manages £68.2 billion of assets (as at 31 December 2021). This includes £13 billion managed by Rathbones Unit Trust Management. Rathbones has over 1,900 staff in 15 locations across the UK and Jersey.
Rathbones Investment Management Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: Port of Liverpool Building, Pier Head, Liverpool L3 1NW. Registered in England No. 1448919. Rathbones Investment Management Limited is part of Rathbones Group Plc. Head office 8 Finsbury Circus London EC2M 7AZ.
The information contained in this note is for use by investment advisers and journalists and must not be circulated to private clients or to the public.