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Companies Face 71% Likelihood of Finding Modern Slavery in Supply Chains
March 23, 2016
71 percent of companies believe there is a likelihood of modern slavery occurring at some point within their supply chains, according to research conducted by the Ashridge Centre for Business and Sustainability at Hult International Business School and the Ethical Trading Initiative (ETI).
The research was a joint initiative by Ashridge and ETI to get a snapshot of company perceptions and current responses to modern slavery as the new UK Modern Slavery Act comes into effect. It featured interviews with a cross-section of businesses from clothing, department store, grocery, beverage, home and garden, fresh produce, and health and personal care sectors.
Cindy Berman, ETI Head of Knowledge and Learning and report co-author, said, “We’ve been working with companies on the ethical trade agenda for more than 15 years. We know that many workers are exploited — particularly migrant and vulnerable workers at the lower tiers of supply chains. But the research has revealed that some companies are becoming more honest about the risks of forced labour and are starting to own up to their responsibilities in addressing it.”
Brands and retailers are still mainly concerned with risks to their reputations if modern slavery is found, but recognize that the real risks are to the human rights of workers. And they realize that they need to take a different approach to managing risk.
Quintin Lake, report co-author and research fellow at Ashridge, said, “All of those we spoke to have publicly committed to ethical trade and are taking active steps to improve working conditions in their supply chains. However, they all agreed that the challenge of modern slavery requires distinct policies, activities and approaches. For example, many have realized that social audits are simply not revealing the hidden nature of modern slavery and they are working on better ways of finding out what is really going on in their supply chains.”
Companies are realizing they need to be more innovative and to collaborate with others because they cannot tackle these problems alone, but competitive tensions can be a barrier. They highlight that building trust and working in partnership with suppliers is far more effective than compliance-driven approaches.
One important finding of the study is that addressing modern slavery is a leadership issue. Where boards and chief executives are demonstrating active engagement with this issue, those companies are much further ahead in their efforts to tackle it than those where this leadership is not evident.
Berman said: “This confirms what we know from ETI’s experience of working with companies. Board and senior-level buy-in makes all the difference in ethical trade because it drives better policies and ways of operating. These companies also tend to be more commercially successful because they have more visibility, oversight and control over their operations.”
Companies should expect their staff, suppliers and all their stakeholders to be vigilant and to take swift action where violations to workers’ rights are found. But they need to ensure it’s the right action and that they have the necessary skills and expertise.
Lake concluded, “All the companies we interviewed highlighted the need for urgent and decisive action, while recognizing that the complex nature of modern slavery means solutions will not be quick. No one company can solve it on their own. The advice from those more established is that a concerted effort and strategic partnerships are required.”
This research was a collaboration between the Ashridge Centre for Business and Sustainability at Hult International Business School, and the Ethical Trading Initiative (ETI). The project team included Quintin Lake, Jamie MacAlister, Matthew Gitsham and Nadine Page at Ashridge, and Cindy Berman from ETI.
Established in 1959, Ashridge is a leading business school for working professionals with an international reputation for leadership development. It is in the 1% of business schools globally accredited by AMBA, EQUIS and AACSB; the UK, European and American accreditation bodies. Each year it works with over 6,000 managers from 850 organisations in 60 countries.
Working initially with Dame Anita Roddick, founder of The Body Shop International, then at the University of Bath, the Ashridge faculty developed a radically new form of business education, placing the perspectives and methods of self-awareness and action inquiry at the heart of developing leaders for a sustainable future. Much of what is becoming mainstream in corporate sustainability and sustainable leadership development today was foreshadowed in that work — from mindful awareness to conscious capitalism, social enterprise to systems innovation, eco-literacy to collaborative dialogue, these themes have threads of their development in the work of the Bath and Ashridge programmes.
The next programme starts on 19 April 2016. Click here to apply.