Today, there are more than 40 million people suffering in some form of modern slavery. That’s the combined population of New York, London and Bangkok. Modern slavery is a lucrative, US$150 billion industry. And it’s hidden in plain sight.
All of us share a responsibility to tackle this issue. In financial services, for example, socially responsible investing is growing, as more people factor environmental, social and governance (ESG) criteria into their investment plans.
However, the full impact on modern slavery has yet to be realised, largely because the social aspect of ESG often gets overlooked.
Part of the problem lies in definitions. It’s much easier to talk about a firm’s environmental or governance standards, but it’s much harder to define its social impact, particularly as that may be buried far down in its supply chain.
It’s not unusual for a company to deal with over 10,000 third party suppliers in a year – and many firms fail to screen any of them. Hidden deep within this network can lurk groups engaged in modern slavery.
And while most firms mandate formal anti-money-laundering training, they’re far less likely to do so for identifying slave labour and human trafficking.
The good news is that the tide is beginning to turn. Despite their opaqueness, complex networks of supply chains can be navigated. Better data is making it easier to form a complete picture of risk across global supply chains, and artificial intelligence tools are helping compliance teams identify weak links.
Perhaps more important than individual efforts, though, is the power of collaboration. By working together, we can raise global awareness of modern slavery. We can share the critical data that identifies where it lies. And we can finally take steps to eradicate it from our society.
Today we’re at something of a turning point in the fight against modern slavery. Investors are expecting more from their portfolio companies than simply financial returns, and technology is making it easier to identify supply chain risk. At the same time, there is a growing willingness to work together towards a common goal. For all these reasons and more, it’s time to put the S back into ESG.