Modern Slavery in Supply Chains: CCLA’s Latest Data

Back in 2019, CCLA formed the “Find it, Fix it, Prevent it” investor initiative. In 2023, they launched the CCLA Modern Slavery UK Benchmark, and last year they published the 2024 edition. This year they have published the CCLA Modern Slavery Global Benchmark pilot, which builds on the UK benchmark by applying its approach, assessing the modern slavery related disclosures of the top 100 Global companies that ‘supply goods or services’ in the UK and are therefore subject to Section 54 of the UK Modern Slavery Act.

The aims of the benchmark are to:

• Develop a framework on the degree to which companies are active in the fight against modern slavery
• Create an objective assessment of corporate modern slavery performance aligned with UK statutory requirements, UK government guidance, and international voluntary standards on business and human rights
• Support investors’ engagement with companies on their approach to modern slavery
• Provide a vehicle for learning and sharing of good practice
• Create a mechanism to leverage business competition to drive improvement in practice.

These benchmarks are great at identifying which sectors and organisations are leading or lacking in their action to tackle modern slavery and to highlight areas for improvement. In addition, this global benchmark demonstrates which regions are performing better than others.

The benchmarking framework is broken down into five sections:

1. UK Modern Slavery Act compliance and registry
2. Conformance with UK Home Office Guidance
3. Find it
4. Fix it
5. Prevent it

So what were the key findings? Here are my top 5 takeaways:

1. There was more transparency on policy and procedure and less transparency on practice and remedy. For example, across the benchmark sections, compliance with the UK Modern Slavery Act and Conformance with the UK Home Office Guidance were the strongest scoring areas whereas ‘Fix it’, which incorporates the requirement to provide ‘remedy’ when adverse human rights impacts are identified, was the lowest scoring area.
2. Most companies only go as far as desk-based risk assessment and due diligence. For example, even though 70 companies had disclosures about how they conduct risk assessments, only 14 demonstrated that they were integrating on the ground information into their assessments, and although 77 companies disclosed that they had a whistleblowing mechanism, only 40 reported the number of reports that had been received.
3. Companies appear reluctant to disclose findings of modern slavery. For example, only 23 companies disclosed finding a case of modern slavery, which raises concerns about reputation and the effectiveness of due diligence processes – ‘you can’t fix what you have not found’. The benchmark does call out some examples of best practice in this space, predominantly in the technology sector. Of the 18 companies in the sector, 8 disclosed finding cases of modern slavery, and 6 provided details on ‘steps taken to end and mitigate ongoing risks’, including case studies of repaying recruitment fees and addressing modern slavery risks primarily in Malaysia and Taiwan.
4. There is a huge gap between policy and practice when it comes to responsible procurement. For example, 48 companies had a policy on responsible procurement practices but only 9 companies disclosed how these worked in practice and supply chain transparency is lacking with only 26 companies awarded a point for partially disclosing their direct (tier one) suppliers’ locations.
5. We still have a long way to go! Out of the potential 62 points available in the benchmarking, the highest score achieved by a company was 54, and the lowest overall score was 3, with an average of 30. The report identifies the following areas for improvement for companies:
   • To improve governance on modern slavery and to include stakeholder engagement and worker voice, which is reiterated in the recently updated Home Office’s Transparency in Supply Chains (Section 54)
   • To conduct more detailed risk assessments, including assessment of forced labour risks in direct operations and beyond tier one of the supply chain
   • Again in alignment with the updated Transparency in Supply Chains Guidelines, to provide details of suspected cases of modern slavery and what steps have been taken to provide a remedy for victims and the outcomes of this process
   • To implement responsible procurement practices that enable and encourage suppliers to conduct best practice due diligence.

If these key improvement areas are something your organisation would like support with, book a discovery call with our Modern Slavery experts to find out more or take a look at our report on Addressing Modern Slavery in Solar PV Supply Chains.