Martin Buttle: Tackling modern slavery through engagement

01 May 2024 Expert insight

An interview with Martin Buttle, better work lead at CCLA.

This content has been supplied by a commercial partner.

What is CCLA’s approach to responsible investment?

As a charity investment manager, we do various things to make sure that the money we manage for our charity clients is aligned with their values. This includes due diligence and screening out various things that our clients wouldn’t want us to invest in.

We also evaluate the degree to which the companies we are investing in are doing well in terms of environment, social and governance (ESG) factors. Within that we have pillars of work where we are trying to create systemic change in three key areas, namely: better work, better health, and better environment.

My role is within the better work pillar focusing on labour and human rights connected with the world of work. This includes a major programme around modern slavery.

What does this entail?

The Find it, Fix it, Prevent it programme started in 2019. It works to tackle modern slavery in three ways. First, we work collectively to engage the companies we hold on modern slavery, with a strong focus on the construction and hospitality industries.

Second, we engage across government around what changes to public policy we would like to see, to make sure that we are working to address modern slavery, and that companies are making sure that modern slavery is not occurring in their supply chains.

And third, we do a lot of work around data. This examines the prevalence of modern slavery around the world and corporate performance to tackle the problem.

What metrics are used to measure company performance regarding modern slavery?

In November last year, we launched a benchmark of the largest 100 UK-listed companies by market cap on their approach to modern slavery in the following key areas: the degree to which those companies were in compliance with the Modern Slavery Act; the degree to which they were in conformance with the Home Office guidance regarding a good modern slavery statement; and the degree to which they were disclosing information around finding, fixing and preventing modern slavery.

We created a framework of 62 data points across these sections of compliance and then interacted with the companies to adjust any scores when needed. The work covered multiple sectors. Companies were assigned to one of five Performance Tiers, with one being top and five being the lowest.

What we found was that there’s a wide variety of practice, but in broad terms most companies were compliant with the Modern Slavery Act and most were doing what the Home Office wants to see in terms of a good modern slavery statement. However, when we looked at the actual work they were doing to address modern slavery, the disclosures drop significantly, and very few companies were actually disclosing any sort of tangible activity to fix it.

To address this, we have been engaging with companies in tiers four and five to try to get them to improve. The benchmark is a valuable tool for creating a framework within which to talk to companies; it provides a roadmap of what our expectations are and offers a clear set of guidelines for a conversation with companies.

Why has the focus of your work been on the construction industry?

Construction is seen as a very high-risk sector for modern slavery because it involves a lot of lowwage and relatively low-skilled work and globally is heavily reliant on migrant workers. The Director of Labour Market Enforcement, Margaret Beels OBE, has also identified the construction industry as one of the highest risk sectors for modern slavery.

There is also a lot of subcontracting in construction which means that rarely is there one entity that has visibility of all the workers on a construction site. Then there are also issues with the provision of raw materials within a construction project’s supply chain. Many come from countries where there is little labour market enforcement.

Through the Find it, Fix it, Prevent it programme we have identified 17 construction companies that we are engaging with to try to get them to shift their approach. We have been working with LGT Wealth Management and the UK Cabinet Office to devise a supply chain sustainability score which rates 25 construction companies using the same methodology that we used to create the benchmark. We hope this provides opportunity for investors in the construction sector to come together to address these issues in a candid way.

Would you advise divestment when problems are brought to light?

I think that would probably be the wrong thing to do. We accept that even the best company may have issues in its supply chain. What we are looking for them to do is to establish good human rights due diligence, where they are doing all appropriate checks and making sure that they have good visibility of their supply chain. They need to understand who they are partnering with, what the risks are, and to form a strategy to mitigate that.

Sometimes when the issues are systemic, you have to acknowledge that this is not something they can change overnight. But they must show that they will work with governments, civil society, charities and others to address those issues in the countries where they find them. We are looking for companies to acknowledge the risks that they have, to disclose what they’re doing to address them and, where they find that they have inadvertently been sourcing from situations where there is slavery, work to put things right.

By engaging companies, we are trying to get them to change their approach and to move modern slavery out of their supply chains and their operations. Through the public policy work, we want to create a level playing field and work with other stakeholders to drive out slavery. I think we are seeing more companies acknowledging this is an issue and wanting to do better human rights due diligence. I can see some change, but I think we have a long way to go.

An interview with Martin Buttle, better work lead at CCLA

Fast facts

  • No. 1 investment manager of UK charities*
  • £14.3bn in assets under management**
  • 60+ years of ESG investing**
  • £17.2tn of assets supporting CCLA initiatives in mental health, modern slavery and climate change**
  • 188 team of staff**
  • Early signatory (2007) to Principles for Responsible Investment (PRI)**
  • 5✶ rated by PRI for listed equities**
*Charity Finance Fund Management Survey 2023
**CCLA: Internal as at 31 December 2023

What we do

CCLA is the UK’s largest charity investment manager. Firmly believing that healthy financial markets depend on healthy communities, CCLA has a long track-record of instigating change for a better world with its pioneering work on climate, modern slavery and mental health. Founded in 1958, CCLA is independently owned by its clients and staff with £14.3bn of assets under management as at 31 December 2023.  

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