This report examines how capital market actors can contribute to solving the issue of modern slavery. The report highlights the importance of building an awareness of modern slavery risks and understanding how ESG risks can impact a company’s operations.

Taking stock of capitalism market actors’ practices

The report found that the understanding of modern slavery risks by capital market actors is still weak. However, investors and stock exchanges are focusing on building corporate capacity to address social risks. ESG risks are becoming more integrated into investment policies, and pre-investment due diligence processes. Senior level buy-in and board oversight are pre-requisites to addressing social risks. Additionally, loan, and shareholder agreements, particularly those employed by DFIs and private equity funds, are beginning to include social risks.

Recommendations for capitalism market actors to accelerate change

• Improve awareness, understanding of modern slavery risks and understanding how ESG risks can impact a company’s operations. Investors should assess the ESG factors, including modern slavery, through the investment life cycle to identify, prevent, mitigate and remediate modern slavery risks.
• Develop dedicated social policies that align with international human rights and labour standards and principles
• Incorporate human rights and environmental due diligence (HREDD) processes
• Increase collaboration with capital market actors to increase leverage, capitalising on shared resources and building each other’s capabilities.
• Partner with modern slavery knowledge experts to provide guidance and access to relevant stakeholders. For instance, civil society organisations, workers’ rights groups and academia can offer vital expertise.