Investors representing $5 trillion sign KnowTheChain investor statement on forced labor – other investors should follow suit
At the start of 2020, KnowTheChain and the Investor Alliance for Human Rights are pleased to welcome the support of 135 investors representing a combined $5 trillion in assets under management. These investors recognize the urgent challenge of forced labor, how they may be exposed…
January 22, 2020
At the start of 2020, KnowTheChain and the Investor Alliance for Human Rights are pleased to welcome the support of 135 investors representing a combined $5 trillion in assets under management. These investors recognize the urgent challenge of forced labor, how they may be exposed through their investments, and the need for pressure on companies to address the risks to millions of workers in supply chains around the world.
By adding their name to the KnowTheChain Investor Statement, investors are demonstrating their support for the United Nations Sustainable Development Goal 8.7 to eradicate forced labor. The Statement also establishes what investors should expect and suggests how they can best engage with companies.
KnowTheChain provides analytical, comparable data to help drive engagement with investee companies through benchmark rankings, report narratives, company scorecards, and other investor-focused resources. In addition, KnowTheChain has supported investor-led engagement alongside the Interfaith Center for Corporate Responsibility, the Investor Alliance for Human Rights, As You Sow, and individual investors.
Investors, armed with KnowTheChain data, have driven change in company policies to address forced labor in supply chains. In the 2016 Food and Beverage benchmark, Monster Beverage scored 0 out of 100, placing it last among its peers. This poor performance spurred a conversation with the lagging company, and a shareholder resolution from As You Sow. Investors lined up in support of the resolution, resulting in the company taking action. Monster Beverage subsequently started to provide sustainability disclosures on its website, developed a supplier code of conduct, and a slavery and human trafficking initiative.
Monster’s improvement provides one example of the impact that can result through data-based engagement with companies on the issue of forced labor. As investors continue to add their support to the initiative, KnowTheChain is forging ahead. In 2020 and 2021 KnowTheChain will benchmark 180 companies across the Information & Communication Technology, Food & Beverage, and Apparel & Footwear sectors, and invite investors to use these company and sector-specific materials in their engagements and investment decision-making.
Julie Tanner, Managing Director of Christian Brothers Investment Services, said:
“By highlighting company-specific gaps, better performing peers, and leading practices, KnowTheChain benchmarks have strengthened our engagements and enabled us to distinguish companies that are taking important and replicable steps from those whose inaction is putting vulnerable workers at risk. We encourage all investors to join us and publicly state their commitment to address and root out forced labor.”
Investors wishing to sign the statement can do so here. The KnowTheChain benchmark findings are also used in collaborative engagements which investors are welcome to join. For more information contact Felicitas Weber at email@example.com.
The Interfaith Center for Corporate Responsibility, with support of the Principles for Responsible Investment, is leading an apparel sector engagement. Supported by more than 50 global investors, the engagement focuses on the lowest scoring companies in the KnowTheChain apparel benchmark, and in particular on the topic of responsible recruitment of migrant workers.
CCLA’s ‘Find it, Fix it, Prevent it Initiative’ focuses on tackling modern slavery by engaging with policy makers, companies, and ESG data providers. The initiative will also engage with the lowest scoring companies in the KnowTheChain benchmarks, including those in the ICT and food sectors.
Members of the Interfaith Center for Corporate Responsibility are filing shareholder resolutions based on the KnowTheChain findings and other sources at companies including at Tyson (upcoming AGM: February 6, 2020) and Skechers (upcoming AGM: May 22, 2020).
Patrick O’Hara, Senior Responsible Investment Analyst, USS said:
“USS recognizes the importance of eliminating forced labor from supply chains once and for all and the potential materiality of this issue for businesses that don’t act. KnowTheChain provides valuable and detailed intelligence to investors on corporate human rights performance in supply chains. This is useful for investors for both risk identification and engagement preparation.”
As the owners of capital, investors can and should play a key role in eradicating forced labor in global supply chains. Publicly taking a position and committing to working towards eradicating forced labor is an important first step as it sends a clear signal to investee companies.