The Principles for Responsible Investment is urging Australia's biggest financial institutions and asset owners, including insurance companies (that own a great deal of investment stock), to sign a statement of support of creating a Modern Slavery Act in Australia.
It is estimated that almost 21 million globally people are victims of modern slavery, though naturally we think this is not an Australian issue - think again. Local superannuation funds and investment managers need to consider possible exposure to local and international slavery, which includes migrant workers in forced labour. This forced labour is occurring across several industries, with agriculture, construction and hospitality the most common. Australia is not exempt. Modern slavery may look a bit different to what we think it ought to, but slavery comes in many forms.
The Act is concerned with where we invest our very dense thicket of superannuation funds, and ensuring that the supply chain does not contain slavery. Having the companies that invest on our behalf taking part in this, signatories of this Act, means we can rest assured that none of our hard-earned superannuation savings are supporting slavery either directly or indirectly.
The obligations go further than not profiting from slavery by not investing in countries that have a lot of slavery, however, and branch into the supply chain. Improving transparency on modern slavery risk management is key to making informed decisions.
Three large investment vehicles have already thrown their weight behind the new Act: IFM Investors, HESTA and Cbus Super. The Joint Standing Committee on Foreign Affairs, Defence and Trade of the Parliament of Australia is currently consulting on a draft version of the proposed Act.
Australia's largest investors are being asked to sign the statement supporting the Act. This holds institutions to account for participating in human rights abuses via the support of slavery in any form. This is an investment issue as much as a human issue - negative impacts on humans tend to reduce profits overall, as we've seen with diversity on boards and environmental stewardship.