A multi-faceted approach to managing modern slavery risk

In September 2022 the International Labour Organization updated its estimate of the number of people living in modern slavery globally on any given day to 50 million— an increase of 10 million since 2016.

Beyond compliance with legal reporting obligations, modern slavery is a critical “S” factor as we integrate ESG (environmental, social and governance) factors into our decision-making. We recognise that social factors carry investment risks and opportunities for our investment portfolios and business operations. Our focus on managing modern slavery reflects our commitment to promoting fair and safe workplace standards and upholding the human rights of working people.

Over the past 12 months we have continued to build on processes across our business and investment operations to further embed modern slavery risk considerations.

Peer benchmarking and gap analysis

A key focus for 2022 was understanding our current modern slavery response through a peer benchmarking and gap analysis exercise. This helped us to understand how we are positioned relative to industry peers, as well as on the continuum of compliance with best practice. Covering our direct operations and corporate supply chains as well as our investment portfolios, the analysis identified opportunities for us to enhance our approach. The recommendations will inform our workplan going forward.

Guidance for Infrastructure asset directors

In collaboration with third-party specialists, we developed a Modern Slavery Guidance note for our Infrastructure team asset directors. The Guidance note aims to support directors to drive portfolio companies’ actions to manage modern slavery risks and comply with modern slavery legislation. It includes an indicative list of high-risk goods and services; a checklist of suggested actions for portfolio companies; definitions of modern slavery practices; and links to key resources.

In the coming months we plan to review our infrastructure ESG due diligence mechanisms to help ensure modern slavery considerations are adequately captured and consistently reflected. We will also seek opportunities to engage with assets in high-risk industries to understand and support the uplift of modern slavery risk management activities, focusing on encouraging the provision of trusted and accessible grievance mechanisms.

Modern slavery engagement with ASX200 companies

We continue to work closely with the Australian Council of Superannuation Investors (ACSI) and other investors to monitor compliance and quality of modern slavery reporting across ASX 200 companies. We also collaborate with industry peers through Investors Against Slavery and Trafficking Asia-Pacific (IAST APAC). Through this initiative, we participate in engagements with various large Australian retailers. Read our latest Australian Listed Equities Engagement and Voting Report to learn more about our modern slavery engagement in the July to December 2022 reporting period.

Lifting internal capabilities

Building on work undertaken in previous years, we remain focused on increasing knowledge and understanding of modern slavery, and lifting the capability of our people to identify and mitigate modern slavery risks across our business, supply chain and investments in all asset classes. We delivered mandatory training to IFM employees who have opportunities to influence change through board level positions across our private asset holdings in Infrastructure and Private Equity asset classes. The training aimed to equip nominee company directors and those who support them with an understanding of modern slavery risk indicators, and covered the assessment of modern slavery risks in due diligence processes.

Modern slavery oversight in our corporate procurement activities

As it relates to corporate procurement, modern slavery oversight has moved into an ongoing business-as-usual approach. We have updated our tools and templates and we are embedding modern slavery considerations into our social procurement approach.

We are drafting a supplier code of conduct, which aims to establish the minimum behaviours we expect of our suppliers. While this will have a particular focus on modern slavery, it will also encompass a range of other material ESG considerations.

We are also undertaking a deep dive exercise to examine supplier policies and processes, and to identify training that suppliers could undertake - particularly those in industries identified as high risk. The travel industry, for example, is high risk, and we are engaging with our corporate travel agency to help ensure risks are identified and managed.

Our annual Modern Slavery Statement details more on our approach and activities in this important area of work.