Modern slavery legislation – key developments
Our engagement sought to identify best practices implemented by “high-risk” companies
Addressing modern slavery risks in lower-tier suppliers is not yet commonplace
Supply chain transparency has to be accompanied by robust auditing
Transparency is key if companies face heightened modern slavery risks, and business model shifts may necessitate enhanced due diligence
Against this backdrop, companies with products containing cobalt need to be as transparent as possible about the
steps they are taking to address and mitigate the risks associated with cobalt sourcing. It is encouraging that many large auto manufacturers – including Ford and General Motors – are members of the Responsible Minerals Initiative (RMI), which provides companies with tools and resources to make sourcing decisions that improve regulatory compliance and support responsible sourcing from conflict-affected and high-risk areas. An example of a company producing rechargeable battery materials which provides exemplary reporting on cobalt sourcing is Umicore, a global materials technology and recycling group. Umicore was the first company in the world to introduce a Sustainable Procurement Framework for Cobalt and to obtain external validation for its approach to ethical cobalt sourcing12.
Our engagement with companies, the spread of legislation addressing modern slavery, and the disproportionate impact of COVID-19 on vulnerable communities are all factors reinforcing our view that companies cannot afford to ignore modern slavery. We urge companies to be as transparent as possible about how they are identifying and – crucially – proactively addressing modern slavery risks in their direct operations and supply chains.
Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.
The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.
1 https://www.bmogam.com/gb-en/intermediary/ news-and-insights/esg-viewpoint-modernslavery/
2 https://delta87.org/2020/03/impact-covid-19- modern-slavery/
* for at least one of its two most recent financial years
3 https://www.gov.uk/government/publications/coronavirus-covid-19-reporting-modern-slavery-for-businesses/modern-slavery-reporting-during-the-coronavirus-covid- 19-pandemic
10 https://www.globalslaveryindex.org/2018/data/country-data/congo-democratic-republic/ NB. The Democratic Republic of Congo has a score of 91.72/100