A new report from Know the Chain is a timely assessment of the status of human rights due diligence efforts and, according to the authors – “new evidence and analysis to underpin the design of effective due diligence… [as] limitations of transparency legislation as a tool for addressing forced labour in global supply chains are now apparent and a more exacting approach is required to insist on effective action to prevent abuse.”
The report “assesses business’s due diligence conduct in perhaps the most egregious cases of labour rights abuse: forced labour and human trafficking, focusing on three high-risk sectors: ICT, food and beverage, and apparel and footwear.”
- Surprisingly, only 2 of the 129 global companies reviewed “stand out as having advanced steps and implementing increasingly effective policy to eliminate forced labour. These companies demonstrate strong commitment and effort to eliminate forced labour, demonstrating this is both achievable and commercially viable.”
- Further, “a quarter (25%) still do not report carrying out the baseline step of conducting a human rights risk assessment of their supply chains. Nearly half (45%) of these companies have yet to disclose even first-tier supplier lists, and 64% still do not report engaging with stakeholders on forced labour…”
In addition to Know the Chain, State Street Global Advisors (SSGA) published results of a few of their human rights engagements where they “identified the key challenges that companies face and some potential best practices they have adopted to address modern slavery risks in their supply chain.” This information might be valuable to those companies in which SSGA is a significant shareholder.
What This Means
These are both timely and useful publications. The Know the Chain report is written with a government audience in mind, to help inform and guide them in developing new human rights due diligence policies that go beyond just disclosure/transparency. The US Department of Homeland Security may be one agency that finds this informative as they seek input on implementing the Uyghur Forced Labor Prevention Act. At the same time, companies will find the report useful as well.
SSGA’s insights may be helpful for companies evaluating their programs in response to SSGA – or possibly other investor – engagement.