The Interfaith Center on Corporate Responsibility (ICCR), a coalition of 300 investors with assets under management of over $100 billion, along with Calvert Investments and Christian Brothers Investment Services, commend Congresswoman Carolyn Maloney (D-NY) and Congressman Chris Smith (R-NJ) for this week’s introduction of The Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 in the U.S. House of Representatives. The bill was introduced following Monday’s publication of the State Department’s 2015 Trafficking in Persons report, which called on governments to “set clear expectations for businesses on human rights issues and adopt policies that promote greater transparency and better reporting on anti-trafficking efforts in supply chains.”
The groups have also expressed support for Senator Richard Blumenthal’s (D-CT) forthcoming companion bill to be introduced in the Senate shortly. The identical bills would require public disclosures to the Security and Exchange Commission regarding auditing and verification procedures, risk assessments, training, remediation plans and accountability mechanisms that address trafficking and slavery risks. If enacted, the bills would apply to all publicly traded or private entities in every sector and, consequently, would have broad international impact.
“This act is a real game-changer that is much needed by consumers, investors and most importantly, those who have been made victims by human traffickers,” said David M. Schilling, senior program director of ICCR. “This would require corporate reporting on human rights risks within their extended supply chains down to the commodity level.”
“Companies without a clearly formulated, comprehensive and proactive approach, leave themselves open to a variety of risks, including reputational, legal, and regulatory risk,” stated Julie Tanner, assistant director of Catholic responsible investing at Christian Brothers Investment Services. “The disclosures required by these bills will provide investors with the information necessary to adequately evaluate risks to their portfolios and potential impacts to shareholder value.”
The Maloney bill builds on The California Transparency in Supply Chains Act, which took effect on January 1, 2012 and applies to manufacturers and retailers doing business in the state. In addition, the recent release on March 2, 2015 by the Federal Acquisition Registry of the rules related to President Obama’s Executive Order raises the bar by requiring all companies with government contracts to certify that they have done their due diligence in confronting and remediating human trafficking and slavery in their extended supply chain. A similar law in the UK, the Modern Slavery Act of 2015, calls for corporate disclosure on human trafficking mitigation efforts. The law includes a Transparency in Supply Chains clause encouraging business to take action to ensure their end-to-end supply chains are slavery free.
“Human trafficking is a growing problem within global supply chains. If enacted, this law will raise the bar on corporate disclosure and investors will be better positioned to more effectively assess how companies are managing these risks,” said Mike Lombardo, Senior Sustainability Analyst and Manager, Index at Calvert Investments. The UN Guiding Principles on Business and Human Rights clearly spells out the responsibility of companies to respect human rights, which includes reporting on what a company is doing to assess and address incidents of trafficking throughout its supply chain.
“Beyond a company’s required regulatory and legislative compliance lies a clear moral mandate: safeguarding human rights is everyone’s business,” Schilling said. “As faith-based and responsible investors we view this mandate as fundamental for companies to retain their social license to operate.” ICCR applauds the leadership of Congresswoman Maloney and Congressman Smith. The pervasiveness of trafficking and slavery require effective legislation that moves beyond voluntary disclosures and levels the playing field for all companies. We strongly urge members of Congress to co-sponsor this bill.”
While governments are determining criteria for compliance when it comes to businesses mitigating human trafficking in their supply chains, organizations such as the Tronie Foundation are working with companies in a variety of industries to help them proactively identify and eradicate it. The Foundation’s Freedom Seal is a communications tool and a solution to help companies identify slavery-related issues. As co-founder Rani Hong told Sustainable Brands in a recent interview: “There is no longer any reason companies today cannot take action against slavery. The Tronie Foundation is here to help.”