Financial services show progress in addressing modern slavery

Financial services firms including Investec, M&G, St. James’s Place, London Stock Exchange Group, Lloyds and Legal & General are among the companies to have most improved their performance in addressing modern slavery, according to CCLA.

In the firm’s third annual UK Modern Slavery Benchmark, six out of the 10 most improved companies since 2023, when the benchmark was launched, were in financial services. CCLA assessed 111 companies comprised of the top 100 UK listed companies in the MSCI IMI 100, plus companies that were benchmarked within the past two years that have since dropped out of that index. It implemented a scoring system of 48 different criteria, based on modern slavery statements accessed from company websites as well as other public disclosures.

Overall, performance has improved widely with 56 firms now sitting in the benchmark’s top two tiers, up from 46 last year, and 37 in 2023.

The top 10 most improved companies since the benchmark was first published in 2023 are, in order of the number of points improved: Investec, Airtel Africa, International Consolidated Airlines Group, Legal & General Group, London Stock Exchange Group, Beazley, Lloyds Banking Group, Croda International, M&G and St James’s Place.

CCLA noted companies in financial services are responding positively to engagement from investors on modern slavery issues, and the “negative associations of lagging performance in a public benchmark”. The investment manager formed the ‘Find it, Fix it, Prevent it’ investor coalition in 2019 to share knowledge and monitor progress on addressing modern slavery in businesses’ supply chains. This is now backed by 70 global investors representing £19.3trn in assets.

Sitting in the top tier as leaders on human rights innovation were Tesco, Unilever, Sainsbury’s, M&S Associated British Food, Burberry and British American Tobacco.

See last year’s update: CCLA: UK companies still failing to address modern slavery

Despite the progress, there are six firms remaining in Tier 4 of the benchmark, including 3i Group, B&M European Value Retail IG Group, LondonMetric Property and Wise. However, there are no firms in Tier 5.

Commenting on the findings this year, Peter Hugh Smith, CCLA chief executive, said: “Modern slavery is a moral stain on the global economy. Companies have a clear responsibility to stamp it out throughout their operations and value chains, and it is encouraging that companies assessed in our benchmark are improving their performance.

“As investors, we have an obligation to work with companies to help them do so, and to hold them to account when they fail to take modern slavery seriously. Our benchmark brings much-needed transparency to the corporate response to modern slavery, and we encourage investors to join us in using it to engage with companies on the issue.”

Tightening regulation

CCLA also noted a series of tightening modern slavery rules around the world that businesses will soon need to adhere to:

1. UK Employment Rights Bill and potential reforms to the 2015 Modern Slavery Act;
2. EU’s CSDDD mandating human rights due diligence for large companies;
3. Several European countries (Germany, France, Norway) already enforcing mandatory due-diligence laws;
4. Asia-Pacific nations (including Thailand, Japan, Indonesia and South Korea), as well as Australia, strengthening or drafting regulations to require more robust human-rights oversight across supply chains.

Dame Sara Thornton, consultant modern slavery for CCLA, commented: “Companies need to be aware that addressing modern slavery is not just the right thing to do – it is also a growing regulatory imperative. We are pleased to see countries around the world introducing legislation to tackle this scourge, and we urge the UK government to act to bring its 2015 Modern Slavery Act – which was world-leading when it was passed – up to date by ensuring that its transparency rules are tougher. But government needs to go further, requiring companies to undertake due diligence, and introducing an outright ban on the import of goods made with forced labour.” 

Lord Alton of Liverpool, chair of the UK Parliament’s House Joint Committee on Human Rights, added: “Our joint committee found that the UK’s patchwork of legislation is not preventing goods linked to forced labour from entering the UK market, nor is the Modern Slavery Act preventing forced labour in supply chains. It is clear that new legislation is required.

“However, it is encouraging to see the current legislation being used by CCLA to hold UK companies to account, including for their performance in finding modern slavery and addressing it in line with the UN Guiding Principles on Business and Human Rights.”