Press release: First analysis of FTSE 100 statements for UK Modern Slavery Act: a gulf opens up in company performance
First statements made under UK Modern Slavery show deficit in action from top UK listed firms
London – A gulf exists between a handful of responsible FTSE100 companies reporting rigorous action to eliminate slavery, and the rest. The majority of company statements for the UK Modern Slavery Act demonstrate weak risk assessment and due diligence. Most of the twenty-seven FTSE100 companies that have reported so far are missing the opportunity to provide much needed leadership to eradicate forced labour from business operations and supply chains, says Business & Human Rights Resource Centre.
The FTSE 100 companies who have reported under the Modern Slavery Act so far were scored on their action to eliminate slavery from their operations and supply chains and the extent of their disclosure under the Act. Companies were put into ten tiers (tier one the best performing, ten the worst performing). The Resource Centre also recorded whether companies had met the minimum legal requirements.
Almost half the companies are in the bottom three tiers. The two best performing companies, Marks & Spencer and SAB Miller (SAB Miller was subsequently acquired by AB InBev on 10 October), are in tier three; no firms made it to tier one or two. Babcock Intl.(tier 10), Experian, Provident Financial, and SSE (tier 9) received the lowest scores.
UK Prime Minister, Theresa May, recently said a total of 45 million people are victims of modern slavery worldwide, with around 13,000 victims in the UK. From Thai fishing boats to Cambridgeshire car washes, modern slavery destroys lives abroad and in the UK, as well as fuels corruption globally. The International Labour Organisation estimates that modern slavery generates as much as $150 billion per year in illicit profits.
In 2015, the UK passed the landmark Modern Slavery Act which includes among its provisions a requirement for any company with a turnover of at least £36 million operating in the UK to report on the steps it is taking to address the risk of modern slavery in its operations and supply chains. The UK government suggests that companies describe their organisational structure and risks, company policies, due diligence, effectiveness of measures taken and training. Business & Human Rights Resource Centre measured the quality of statements on these areas, using guidance provided by the Home Office and CORE Coalition.
Analysis showed most companies provide too little information on the structure and complexity of their supply chains. Even fewer identify specific slavery risks, both with regard to the type of risk and where in the supply chain the risk was identified (sector or location). Without this crucial first step of understanding their own operations and supply chains, companies are unlikely to be able to take significant action on slavery. This is especially important for global firms with complex structures and supply chains where there are slavery risks in everything from their cleaning and catering services, to the manufacture and shipping of their products.
Phil Bloomer, executive director of Business & Human Rights Resource Centre said:
“This is the first year of reporting, so no-one expects perfection. But it’s disappointing how small the leadership group is. These leading companies deserve credit: they demonstrate the commercial viability of assessing risk, taking robust action and ensuring remedy. Their care also highlights the poor performance and reporting which seems endemic in the larger group. No company wants the scourge of slavery in its operations and supply chains, so why are too many well-resourced FTSE 100 companies apparently doing so little? There are no excuses for inaction on slavery. We hope the next group of FTSE 100 companies to report will leap-frog these, and emulate the better practice of the leaders.”
There was also patchy compliance with the requirements of the Act. Companies must make a statement approved by the Board and signed by a company director (or equivalent), available from the homepage of the company’s website. Our assessment was that 15* of the 27 statements fully comply with these three requirements - Babcock International did not meet any.
Very few companies reported that they provide training on modern slavery to staff or monitor the measures they have put in place to deal with slavery risks. Reporting on training and effectiveness received the lowest average score across measurement areas, 1.4 and 1.0 out of 5 respectively.
Marilyn Croser, director of CORE Coalition said
“This analysis exposes a shocking level of inaction within big business on modern slavery. There is simply no excuse for such well-resourced companies to publish these poor quality reports. We have produced clear guidance for companies on what they should be doing to help eliminate modern slavery and how they should report this under the Act, in addition to guidance from the Home Office. As more examples of good practice emerge, it will be down to other companies to up their game. If they fail to do so, the inevitable result will be louder demands from civil society for government enforcement action and stricter legal requirements. ”.
A central registry of statements
Business & Human Rights Resource Centre launched its UK Modern Slavery Act Registry in February 2016. The Resource Centre actively monitors the release of company statements and adds them to its free and open Registry to allow comparison and benchmarking of companies’ policy and practice. The Registry of over 760 statements grows daily; investors use it to assess company risks, and consumers and activists can use it to reward leading companies and press laggards to take action. Companies also use it to learn from their peers. A live dashboard enables users to explore statements by sector and country of company headquarters.
* Two companies, Experian and British Land Company, have provided additional statements to confirm that their board has approved their Modern Slavery Act statement.
Notes to Editors
Joe Bardwell, [email protected], +44 (20) 7636 7774, +44 7966 636 981
If your company has produced a statement to comply with this legislation that you would like to appear in the Registry, please send it to Patricia Carrier ([email protected])