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James Corah: ‘We are forgetting what is really important from a real-world perspective’

03 May 2022 Expert insight

You have to face up to the problems of the real world to make real-world change

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“Environmental, social and governance (ESG) investing is becoming really focused on metrics and numbers, policy and process,” says head of sustainability at CCLA Investment Management Ltd, James Corah. “We are forgetting what is really important from a real-world perspective. And when you look at the power that the investment industry actually has, as the owners of the capital, it is not really using it properly yet. The power for charities and organisations that care about change to push everyone in the right direction is huge.”

An archetypal example of this lack of real-world application is the perpetuation in society of modern slavery. An estimated 40 million people are trapped in a state of slavery, ranging from debt bondage to forced marriage to human trafficking and prostitution. And it touches all of our lives. The Ashridge Hult Business School ran an anonymised survey of UK retailers and found that 77% believed slavery exists in their supply chain somewhere, despite policy and public statements denouncing such practices.

Corah says: “Everyone in the industry is talking about slavery and human rights as being important, but we have found that very few businesses have created a really concerted effort to try to drive change. We have seen a lot of great policies and processes being created – more and more shiny modern slavery reports. But on the back of this work, very few organisations have said what they have found or what they have done about it.”

Breaking down barriers

According to Corah, there are three main structural barriers to tackling this problem. The first is regulatory. He explains: “The Modern Slavery Act is great. It really was a world-leading piece of legislation when it came in. But it doesn’t have any teeth to it, and it definitely doesn’t have huge incentives. So there’s not really a regulatory carrot or stick to make it work when it comes to enforcement.”

Another barrier is potential reputational damage for those companies that are looking to uncover instances of modern slavery within their operations. The likelihood is that any revelations will not play out well in the media.

“When you see companies associated with modern slavery it is always negative, even when they have found it,” says Corah. “It is not a positive media environment and although that may be right and expected, it doesn’t create the kind of culture that allows companies to be open and honest.”

The other element is a lack of motivation among owners to discover problems. “As owners of these companies, the investment industry hasn’t really pushed for businesses to do the right thing,” says Corah. “In fact, quite the opposite. Often they don’t want you to find any problems, because they don’t want to be associated with them. There is also the fear that your investors are going to run away at any sign of a problem.”

Engaging versus divestment

In order to make real change, says Corah, simply walking away is not a solution. “In the past, if you found a company had problems, you would divest, and that is not really helpful. What we have got to do is build an open and supportive conversation.”

To this end, CCLA created a modern slavery programme, backed by CEO Peter Hugh Smith as patron. The project looks at how CCLA can support the companies in which it invests on their journey to eradicate modern slavery from every part of their supply chain.

Corah explains: “We can say to a company that we think slavery exists in its supply chain somewhere and maybe we should be looking at it in a more human-centric way. The whole programme is designed to look at things differently and take companies through that journey. If you find problems, what have you done to remedy it? How have you supported victims? How can you prevent it happening again? If the conversations are open and honest, you will have a much more positive outcome for everyone.”

With a support network offered by the investor, the companies themselves are beginning to be bolder and more proactive, says Corah. “We have found that companies have been hugely welcoming and want to make the necessary changes. Knowing that we will not drop them at the first sign of trouble gives them confidence to push forward the necessary processes and not be fearful of looking for problems.”

Corah is optimistic but says there is a still a long way to go. “Obviously, different companies are at different stages on that journey. But there’s been a collective embracing of what we are trying to do and accepting the world for what it is. That’s allowing us to make change happen, rather than pretending we live in a world where everyone is free and happy in our supply chain.”

What we do

CCLA is a specialist investment manager dedicated to serving charities, faith organisations and the public sector. We believe tackling the issues of our day head-on as responsible investors is the only way to deliver strong, sustainable returns to our clients. Our pioneering approach to responsible investment originates from our heritage as the investment advocate for not-for-profit organisations.

Fast facts

  • 60+ years of ESG investing*
  • No. 1 investment fund manager of UK charities**
  • £14bn+ in AUM*
  • First investor initiative to protect mental health at corporates*
  • £7tn+ of assets supporting CCLA initiatives*
  • Founder member of four global climate initiatives*
  • A+ rating by PRI***

*CCLA: Internal as at 1 March 2021
** Charity Finance Fund Management Survey November 2021
***PRI Assessment Report 2020

James Corah is Head of Sustainability at CCLA Investment Management Ltd


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