Introduction

The report discusses modern slavery and the role investors play in enabling remediation for victims. It highlights the prevalence of modern slavery, with 49.6 million people affected globally, including 27.6 million in forced labour. Investors are increasingly expected to respect human rights and address modern slavery risks in their portfolios. International frameworks such as the United Nations Guiding Principles (UNGPs) and national legislation are pushing investors to take action.

Investor responsibility

Investors are connected to human rights impacts through their operations and investment portfolios. The UNGPs provide guidance on the responsibility of businesses and investors to respect human rights and address any violations. Depending on whether investors cause, contribute to, or are directly linked to harm, they may need to enable or provide remedy. Failing to address modern slavery risks exposes investors to legal, financial, and reputational risks, especially with the rise of human rights due diligence laws in jurisdictions like France, Germany, and Australia.

Responding to business risk

Investors must assess how they are connected to human rights abuses in their investee companies. This involves conducting human rights due diligence and requiring investee companies to implement grievance mechanisms. The report suggests that investors use their leverage to ensure investee companies provide remediation. Case studies such as Shimano’s investigation into labour violations and Dutch Pension Fund’s intervention with Vale following the 2019 dam collapse demonstrate how investors can support the remediation process.

Enabling remediation in investee companies

Investors can contribute to remediation by engaging with investee companies before, during, and after human rights violations are identified. Proactive measures include encouraging investee companies to establish grievance mechanisms and adopt responsible business practices. Case studies highlight best practices, including FSI’s engagement with a labour-intensive manufacturer and ANZ’s remedy for its financing of a Cambodian sugar plantation. These examples show the effectiveness of investor action in facilitating remediation.

Advocacy and the ‘remedy ecosystem’

Investors also have a role in strengthening the broader “remedy ecosystem.” This involves working with policymakers to advocate for stronger legislation and frameworks that support remediation efforts. The Investor Alliance for Human Rights and other collaborative initiatives demonstrate how investors can collectively influence policy changes to improve human rights practices. Collaboration with industry associations, NGOs, and international organisations can increase the availability and effectiveness of remedy.

Collective remedy

The report emphasises the importance of collective approaches to remedy. Working together with peers, industry bodies, and civil society organisations allows investors to share knowledge and address systemic issues. Examples of collective remedy include the Supply Network Intelligence System founded by Outland Denim and others, which established a grievance programme for Turkish cotton farmers, and the Child Labour Remediation Hub, focused on addressing child labour in cobalt mining in the Democratic Republic of Congo.

Conclusion and recommendations for investor action

The report concludes with practical recommendations for investors to enable remediation. These include setting clear expectations with investee companies, using leverage to ensure remediation is provided, and collaborating with stakeholders to strengthen the overall remediation process. Investors should also be prepared to escalate engagement if companies are uncooperative, including actions such as filing shareholder resolutions or divesting as a last resort.