As society has advanced, greed amongst companies has become increasingly common. Many companies have placed the importance of profits above everything, including human rights. Decent work cannot exist where modern slavery and child labour persist. Despite violating human rights being a crime, it is alarmingly widespread. The elimination of all forms of forced and compulsory labour is being driven by the United Nations Global Compact (UNGC).

It is hard to understand the extent of these violations without looking at the figures surrounding these problems. The figures surrounding human rights violation are alarming. An estimated 25 million people are in forced labour and 152 million children are estimated to be victims of child labour and almost half of these children are doing work that is hazardous in nature. The profits made from forced labour are at an estimated $150 billion per year.

Many reasons drive modern slavery and child labour existence. Factors such as poverty, poor governance, lack of transparency, closed political space, crime, and corruption. Businesses play an important role in the effort to completely eradicate human rights violations and decent work deficits in the global supply chain. To help companies change the world for the better, UNGC outlines five necessary steps to put an end to modern slavery and child labour.

The first step is to get commitment and resources. The management should announce it clearly to the public that their company is free from modern slavery. Additionally, corporate policies and strategies should be revised to make sure that it is aligned with their commitment. It is also important to allocate additional resources to make sure that all of these can happen.

The second step is to assess the actual and potential labour rights risk. These include risks that arise from the supply chain as well as those due to the economic condition of the country. The company could also have a policy dialogue with Governments to discuss how the laws and policies should be improved to reduce the risk of modern slavery.

The third step is to identify corporate leverage, responsibility, and actions. This can be done by assessing the scale of the company’s responsibility as well as the leverage of the company with its suppliers and agents.

The fourth step comprises remedy, mitigation and prevention of harm to workers. The company needs to ensure protection as well as compensate and apologise to victims of human rights abuses in their company. The company could also build relationships with trade unions and independent worker representatives to pre-empt labour rights violations from occurring.

The last step details how to report, monitor, review and improve. The company should publish a modern slavery statement to communicate its commitments and actions. By doing this, it can increase its credibility and transparency with suppliers, investors, workers, and other key stakeholders. Also, the company should develop key performance indicators specifically for modern slavery to track progress in reducing risks.

As more investors are realising the importance of sustainability and considering environmental, social and governance (ESG) criteria in their financial decisions, it is becoming crucial for companies to comply with these steps. Not only investors, but financial institutions have started to take sustainability into account as part of their operations. Financing an industry which produces products or services exposes the risk of contributing to child labour, slavery or human trafficking in the supply chain. Consequently, there is incentive for companies to become more sustainable in their operations as it will affect financing decisions from investors and financial institutions.

1. Studies show that the financial sector is the most exposed industry to the risk of human rights violations yet plays an important role in eliminating this issue.
2. Companies can unconsciously contribute to human rights violations through their supply chain.
3. Human rights violations can affect the company’s credibility and reputation.
4. In the United States, lenders can be held liable if the company it lends money to, causes damage related to environmental, social and governance (ESG) issues.
5. Lending practices may be exposed to human right risks. Lending institutions are not supposed to deny loan applications based on race, religion or gender. But in reality, it may happen sometimes. Not only it is considered discrimination towards the minority, it can also force them to work or borrow money from an unsafe place. Hence, slavery and human trafficking.
6. In recent years, investors have become more aware of the importance of sustainability and the greater return it provides. Research has proven that sustainable and ethical companies perform better in the long run. Thus, more attractive compared to companies that have not implemented sustainability principles in their operations.
7. Sustainable companies have greater access to business opportunities such as new contracts and partnership opportunities. This is due to the aligned vision and mission to change the world for the better.
8. Provides a useful list of key resources, initiatives and opportunities to engage. List includes links to decent work standards, UN Global Compact resources, guidance on human rights, child labour and forced labour as well as the SDGs and engagement platforms.