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FTSE 100 & the UK Modern Slavery Act: From Disclosure to Action

Briefing    Scores     Methodology     Press Release     Registry

In 2015, the UK Government introduced the Modern Slavery Act (MSA), which requires certain companies publish an annual statement detailing what steps they have taken to tackle modern slavery, both in their operations and in their supply chains. Business & Human Rights Resource Centre has tracked companies’ reporting every year since, and our findings show that the MSA has failed to deliver the transformational change many hoped for.

Three years on, most companies still publish generic statements committing to fight modern slavery, without explaining how. Sadly, only a handful of leading companies have demonstrated a genuine effort in their reporting to identify vulnerable workers and mitigate modern slavery risks. 

This report is our third annual assessment of transparency statements by the FTSE 100 under the MSA. As in our previous assessments, the action reported by companies varied greatly, with only a small cluster of leaders standing out, such as Marks & Spencer, Diageo, Morrisons, and Sainsbury’s.

Since producing the report, we have recieved updates and clarifications detailed below.

Read the Report

Key recommendations:

UK Government should

  • Institute mandatory requirements for companies to conduct human rights due diligence as set out in our report on mandatory due diligence.
  • Monitor compliance with the MSA
    • Establish a central registry of statements, similar to the Gender Pay Gap register
    • Publishing a list of the companies required to report
  • Enforce the MSA by imposing impactful financial penalties where
    • Companies that fail to publish a modern slavery statement
    • Companies report they have taken no steps
  • Engage closely with key stakeholders on how to strengthen the MSA and incorporate recommendations from the Home Office review.

Companies should

  • Carry out human rights due diligence that includes direct engagement with key stakeholders with knowledge of the local operating context who can help to identify risks.
  • Disclose the modern slavery risks that are identified in their operations and supply chains.
  • Collaborate with their peers to investigate modern slavery risks in common supply chains and develop initiatives that can bring about industry-wide change.

Investors should

  • Assess modern slavery statements and understand how they fit into wider human rights strategy of the company.
  • Signal to investee companies that comprehensive human rights risk due diligence and management of huan rights impacts are evidence of strong goevernance and management 
  • Use this aalysis and other benchamrks to learn what companies can and should be doing to combat modern slavery, and use these resources to engage with companies. 

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What people are saying

“Big business in the UK has had 3 years to get to grips the Government’s anti-slavery rules, but there has been little genuine effort to end exploitation. The Modern Slavery Act was intended to improve the lives of the most vulnerable workers across the world, and they are still waiting. Until the Government demands more of companies, slavery will remain a dirty secret in the supply chains of many British companies.”

Nick Grono, CEO of Freedom Fund and Chair of the Modern Slavery Registry Advisory Committee

“As it stands today over 40 million people are victims of modern slavery and human trafficking. That’s 40 million too many. Every investor serious about eradicating slavery should demand more from companies. These results show that business on the whole has a long way to go and points to where investors can press for stronger anti-slavery efforts.”

Fiona Reynolds, CEO of Principles for Responsible Investment

 “While it is positive that now all FTSE100 companies are complying with the basic reporting requirements of the Modern Slavery Act, it is worrying that for many this seems to be just a 'tick-box' exercise. Indeed, the majority of companies are failing to provide sufficient evidence that they are genuinely attempting to root modern slavery out of their business and its supply chain. We must praise the efforts of those firms that seem to have taken ownership of this issue but Business and Human Rights Resource Centre have shown how they are still in a very small minority. Given that existing legislation is clearly not strong enough, government must now move to strengthen the requirements for firms to ensure that their operations do not include the exploitation of very vulnerable people through modern slavery".

Anneliese Dodds, MP for Oxford East & Shadow Treasury Minister

 

This is the moment for the Government to take stock of the impact of the Modern Slavery Act on business. The evidence in this report is clear; too many companies are flouting the Act allowing slavery to thrive in supply chains. The Government needs to step up its demand on big business and follow through by enforcing the law. Not doing so will cause more suffering for vulnerable workers worldwide.”

Baroness Young of Hornsey OBE

“We believe modern slavery exists somewhere in the supply chain of almost every company. Yet these results show only a small number of companies are making a strong effort to combat these risks. We would like to see more companies demonstrating good practice. This report gives investors a tool to help eradicate modern slavery and we encourage them to join us in utilising it"

Andrew Adams, CCLA Investment Management Limited

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Company updates

Intertek Group plc has confirmed that the Group’s Modern Slavery Statement for 2017 was approved by the Board of Intertek Group plc on 28 February 2018.