AB: How Investors Can Detect and Disrupt Modern Slavery

NORTHAMPTON, MA / ACCESSWIRE / February 8, 2023 / As we wrap up National Slavery and Human Trafficking Prevention Month, we recognize that this social issue still persists around the world. Watch this video of AB's Director of Social Research and Engagement, Saskia Kort-Chick explaining how investors can detect and disrupt modern slavery by starting with awareness, and how to turn awareness into action: https://www.youtube.com/watch?v=5Pg9r9LPgAU

Generally, companies are comfortable talking about things like board composition or remuneration plans. Most companies these days are aware of their carbon footprint and are comfortable talking about that. But it's much harder for a company to have an open conversation about the potential human rights-related issues occurring in either their operations or their supply chain. We've been engaging with companies on modern slavery-related issues for a number of years. We've engaged with over 19 companies at more than 120 meetings.

There's a couple of lessons that we've learned. So let me start off. In 2021, we included modern slavery in our thematic engagements campaign. There were a couple of objectives as part of that. We worked with investments analysts from the various actively managed equity portfolios and a number of fixed-income analysts. They picked their own target companies who they wanted to focus on to have a conversation around their modern slavery practices. What we learned is that companies with high-risk exposure generally have a better understanding of the risk and are better at managing that. Those companies with less obvious exposure are generally less aware of the risk.

Generally, companies do not want to be associated with human rights abuses either in their own operations or in their supply chain. What we have found, that if you communicate clearly on what your expectations are and not try to single out a particular company and clearly give indication of where you think a company can improve, we have had very positive engagements, and we actually have seen companies making progress on some of the issues that we've asked them to take action on. I think in the markets, there's generally a misunderstanding that modern slavery- and human rights-related risks are not necessarily material.