The fifth successive “Votes Against Slavery” engagement brings together asset managers and institutional investors to target 158 FTSE AIM smaller listed companies and FTSE 350 companies, which fail to comply with Section 54 disclosure requirements of the Modern Slavery Act (2015).

Rathbones, a UK provider of wealth and asset management for individuals, charities and professional advisers, has just launched its fifth Votes Against Slavery engagement (VAS), securing support from a record 154 investors, with assets under management totalling £1.99 trillion ($2.5 trillion).

The 2024 engagement, led by the Rathbones Stewardship team and co-ordinated through the PRI Collaboration Platform, brings together asset managers and institutional investors to target 158 FTSE AIM smaller listed companies and FTSE 350 companies, which fail to comply with Section 54 disclosure requirements of the Modern Slavery Act (2015). The Act requires companies to publish annually updated modern slavery statements to their UK websites.

Modern slavery has a big human and economic impact globally, the firm said in a statement. It is estimated to be a $150 billion trade which affects about 50 million people in some form of slavery including forced labour, selling and people trafficking, forced and servile marriage, and exploiting children.

Business has a key role to play in eradicating modern slavery, and the UK’s landmark Modern Slavery Act sought to bring the business community on board, the firm added. While the Act requires all companies above a certain size operating in the UK to report on how they find and eliminate modern slavery within their supply chains, there is no legal redress for those companies that fail to comply with the regulations.

Smaller companies, which may have fewer resources to devote to due diligence, can also be affected by modern slavery in their supply chains without their leadership's knowledge. For this reason, Votes Against Slavery will engage with this segment of the market to ensure that they adhere to the requirements of the Act, the firm continued.

Policy engagement
Rathbones, alongside asset manager, CCLA, said it will continue its policy engagement with the Home Office, with the aim of strengthening the quality of Section 54 of the Act. This could include mandatory minimum reporting requirements, penalties introduced for failure to comply and a published list of sanctioned entities, regions and bodies.

“According to the latest figures from the United Nations, more than 50 million people are still trapped in some form of modern slavery,” Archie Pearson, ESG and stewardship analyst and voting lead, said.

“Over the past five years we have targeted companies across the market cap spectrum which were not compliant with Section 54 of the Modern Slavery Act. In 2023, 27 of 29 companies we engaged with became compliant, but there is much more to be done, including strengthening the powers of the Act, which is the goal of our joint policy engagement with the Home Office,” he added.

“This year we have identified a large number of non-compliant FTSE AIM businesses, which are yet to adhere to the law. With destabilising confrontations taking place across the globe, the horrifying problem of modern slavery will only get worse,” Matt Crossman, stewardship director, Rathbones, said.

“In the current regulatory vacuum of enforcement, we believe investors have a crucial role in advancing protection for fundamental human rights. We have gathered a coalition of 154 investors to tackle this pervasive problem,” Crossman said. “Through this latest campaign, we call on investors to use their strongest power of censure – voting against the annual report and accounts for companies which refuse to become compliant with the Modern Slavery Act. We believe Votes Against Slavery is the first investor coalition to threaten to vote against the annual report and accounts over a social issue.” 

This news service has also just launched its latest Wealth For Good Awards, giving participants in the global wealth management industry the opportunity to demonstrate their commitment to and pre-eminence in the areas of ESG, Impact, Diversity and Inclusion. For more details about this awards programme, click on this link, which includes information about the judges, categories and sponsors.