CCLA Investment Management has launched a modern slavery benchmark to assess how the largest UK companies by market capitalisation are taking steps to end modern slavery in their operations and supply chains.
The firm said that the benchmark is a tool to provide investors with clarity on companies' involvement in combating modern slavery and to support engagement initiatives.
It assesses corporate performance and disclosures related to modern slavery, adhering to legal mandates, government recommendations, and global voluntary standards on business and human rights.
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Martin Buttle, Better Work lead at CCLA, said investors were in a "strong position" to contribute to ending modern slavery in businesses.
"We recognise that human rights, and specifically modern slavery, is a material risk for companies and that they need to do more to find, fix and prevent it on a global scale," he said.
Buttle said that the firm's intention is that the benchmark will provide an "accountability mechanism" by allowing investors and other stakeholders to assess whether companies are effectively managing the business risks associated with modern slavery.
"It will provide a vehicle for companies to learn and to share examples of good practices and create a mechanism to leverage business competition to drive improvement," he added.
The benchmark report relies on the public disclosures of companies, categorising them into five tiers. As per CCLA analysis, Kingfisher, Marks & Spencer, Next, Reckitt Benckiser, Tesco, and Unilever have been identified in tier one as "leaders in human rights innovation".
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"These companies have displayed an evolved and mature approach to human rights due diligence, with extensive discussion on the risks, case studies on systemic modern slavery risks in the sector, and discussion on meaningful activity to find, fix and prevent modern slavery," the firm said.
CCLA will use this benchmark to encourage companies to improve, but for those companies in tiers four and five that do not engage, the firm's chief executive Peter Hugh Smith said "we will vote against their financial statement and annual accounts".
"We believe that investment portfolios should fall within the scope of modern slavery legislation and we encourage investors to join Find it, Fix it, Prevent it and to engage with portfolio holdings around what is not only an important human rights issue but a material risk to investors," he added.
