Modern slavery statements: Ergon report analyses who is reporting and what companies say they are doing
A new report from Ergon analyses a hundred 'modern slavery statements' in terms of who is reporting and what companies say they are doing. The UK's Modern Slavery Act 2015 requires companies with a global turnover of more than £36 million to make an annual statement on their activities to address forced labour and trafficking in their own operations and supply chains.
The report includes:
- analysis of the sectors, location and sizes of companies reporting
- description of issues covered (policy, risk assessment processes, identified risks, training, performance monitoring)
- length of statements and level of detail
- who has signed-off reports and how they have been published.
This sample represents voluntary reporters in that they pre-date the statutory commencement of the reporting requirement (financial year-ends of 31st March 2016 or later). But the report provides a pointer for how the new transparency requirement is being implemented in practice.
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Author: Ergon Associates
Author: Stuart Bell, Ergon Associates
The UK’s Modern Slavery Act 2015 added an important new human rights obligation on larger businesses, to make an annual ‘slavery and trafficking statement’. Although the statutory duty for companies to report has not yet kicked in (it will become obligatory for financial years ending on or after 31st March 2016), we have found a surprising number of early reporters.Our analysis of a hundred modern slavery statements provides pointers for companies that are currently putting together reports in terms of what early adopters are saying about their modern slavery risks and processes. Overall, our study shows that, while companies are comfortable to state their policies and describe existing audit processes, they are being tentative in revealing much about non-audit based due diligence processes and also the actual risks of modern slavery that might exist in their own businesses or supply chains...The lack of information on identified risks, either in terms of geographical location, type of product or supply chain, is a significant omission and is likely to result more from companies’ reticence to reveal challenges than the actual level of risks. Although NGOs have stated that they will welcome openness, only a few companies are currently accustomed to ‘warts and all’ reporting. It is to be hoped that confidence to make more detailed disclosures will build...By sector, the highest numbers of companies, just short of a quarter, are in the manufacturing sector, followed by food and agriculture (17%), professional services (15%), IT (10%), construction (9%) and retail (8%). The prevalence of statements among manufacturing, food companies and retailers is perhaps to be expected given their exposure to ethical supply chain issues but the number of reports made by professional services and IT companies is more surprising.