Why is it important?
Investment decisions are increasingly taking human rights risks into account. Research has shown that Australians want to avoid investing in entities involved in human rights violations. In addition to the potential for tragic outcomes, our members believe that poor management of human rights, both directly and via supply-chains, impacts upon the commercial success, stability and longevity of a company and therefore can materially impact upon the value of their investment.
It is likely that forced labour or other related practices are present somewhere in the operations or supply chain of most businesses, due to increasingly complex global supply chains, the prevalence of imports from countries with poor human rights track records, and the reliance on base-skilled workers across product and service procurement.
Companies should actively engage with employees, customers, supply chains and other relevant stakeholders to understand and assess human rights impacts and avoid causing or contributing to adverse human rights impacts. Companies should seek to mitigate the risk of adverse human rights impacts in their supply chains and use their leverage to address the issue.
We welcome the introduction of a Modern Slavery Act in Australia which requires some entities to report on the steps they are taking identify and eradicate slavery from their supply chains. Public reporting will allow investors to consider the relevant risks and influence business action on modern slavery. We expect companies to make disclosures in the spirit of the Act, in particular, to address the identification of modern slavery risk and action taken to address the risks identified. As reporting progresses, investors will further develop their views on what constitutes meaningful action and disclosure in relation to modern slavery risk.
 Responsible Investment Association Australasia, From Values to Riches: Charting Consumer Attitudes and Demand for Responsible Investing in Australia (2017) 3-4.