Investor calls on peers to hold portfolio companies in the food sector accountable for forced labour
Lauren Compere, Director of Shareholder Engagement, Boston Common Asset Management explains forced labor risks in the food industry for investors, action taken by investors to date, and calls on peers to ramp up action:
"Last fall I had the unique opportunity to visit with the Fair Food Program to learn and see first-hand what conditions have been like for some trafficked tomato pickers and the incredible improvement in their lives catalyzed by the Fair Food Program [...]
KnowTheChain’s food & beverage benchmark show that more action is needed particularly in areas such as responsible recruitment and purchasing practices [...]
What are investors doing? Since child labor was discovered in the cocoa fields of Africa in the late 1990s and in cotton fields of Uzbekistan starting in 2007, investors have engaged companies on supply chain traceability and transparency related to these human rights risks. [...] Through a public investor statement, a global coalition of over 80 investors with close to $5 trillion in assets under management is supporting a framework for corporate disclosure on human rights based on the UN Guiding Principles for Business and Human Rights (UNGPs).
There has also been concerted effort to specifically engage on forced labor in the agricultural sector. From 2013-2015 the Principles for Responsible Investment (PRI) have coordinated a collaborative investor-company engagement on labor conditions in the agricultural supply chain. This resulted in improved practices at 23 out of the 34 companies engaged over that period, including a number of large US food & beverage companies. Under the leadership of an advisory committee of global investors (Bâtirente, Boston Common, Hermes, PGGM, and Robeco) the second phase of this project will focus on improving traceability in sourcing and enhancing supplier relationships, and is supported by an investor statement which outlines expectations on company policy, practices. The Interfaith Center on Corporate Responsibility (ICCR) has also achieved success through their “No Fees” Campaign engaging 12 companies sourcing palm oil or seafood to create robust management systems which will ensure that workers in their immediate and extended supply chains are not forced to pay for employment. Their plan is to expand this engagement to over 50 companies.
As we celebrate the five-year anniversary of the UN Guiding Principles for Business and Human Rights (UNGPs), which define a global standard for preventing and addressing the risk of negative human rights impacts by business activity, we need to move beyond principles to practice. To ensure this happens, benchmarks such as KnowTheChain can help put a spotlight on forced labor, make a clear comparison to peer companies, and help identify gaps as well as recognize and put a light on leading practices."