Investors Against Slavery and Trafficking Asia Pacific (IAST APAC): submitted by First Sentier Investors

The PRI Awards 2024

Organisation:  IAST APAC (submitted by First Sentier Investors)

Signatory type:  Investment manager

HQ country:  Australia

Other responsible organisation(s):

Aware Super, Ausbil Investment Management Limited, AustralianSuper, Fidelity International, Australian Council of Superannuation Investors (ACSI), Walk Free, Finance Against Slavery and Trafficking (FAST)

Outline the approach, initiative, or process

The Investors Against Slavery and Trafficking Asia Pacific (IAST APAC) initiative is an investor-led, multistakeholder project. It was established in 2020 to engage with companies in the Asia-Pacific region to promote effective action in finding, fixing and preventing modern slavery in operations and supply chains.

IAST APAC comprises 50 investors with AU$12 trillion in assets under management (AUM). The Walk Free and the Finance Against Slavery and Trafficking (FAST) initiative supports IAST APAC as knowledge partners with expertise in the financial sector and modern slavery.

Investors joining IAST APAC can contribute to two workstreams:

1) Investor advocacy workstream

This workstream is related to advocacy, strengthening regulation in the region and sharing information for improved modern slavery risk management and incident response. This work includes engaging with a broader range of stakeholders, including research providers and standard setters, on core modern slavery metrics and how data and disclosure can improve our understanding of modern slavery risks within portfolios.

2) Company engagement workstream

This workstream involves collaborative investor-company engagement in the Asia-Pacific region. Collaborative engagement aims to maximise leverage, generate efficiencies and build knowledge. Investors join this workstream as either a lead or support investor, working within small group collaborations to engage certain companies selected from four initial sectors: consumer discretionary, consumer staples, technology and healthcare.

Investors develop company engagement guidelines in accordance with our engagement framework, which is based on the Find It, Fix It, Prevent It initiative run by CCLA Investment Management in the UK, however we have worked extensively to tailor it to make it relevant to the Asia Pacific context.

Each workstream meets quarterly for knowledge-sharing, member engagement and broader updates, and there are a number of sub working groups that meet at varying intervals.

IAST APAC is well aligned with the central elements of Active Ownership 2.0. We:

• focus on outcomes rather than inputs and processes: the core question we ask investee companies is, has your organisation found modern slavery in its operations or supply chain in the last 12 months? With close to 50 million victims of modern slavery globally, we anticipate that this issue is within the operations or supply chain of every company. We want to determine if a company is taking meaningful steps to address the issue.
• work towards common goals: supporting companies to identify and remedy instances of modern slavery, and take preventative action to avoid recurrence of this issue.
• take collaborative action: this multistakeholder initiative creates an effective environment for collaboration where investors can share and learn from experts and each other. We expect active participation from members; however, we have a range of workstreams and sub working groups which recognises that different investors have different focus areas and levels of capacity and expertise. Our knowledge partners support us to engage with a broad range of stakeholders, particularly amongst civil society and government. We are also collaborating with other investor networks globally, including the Find It, Fix It, Prevent It initiative in the UK.

ESG data

In 2023, a year after it was established, a sub working group of the Investor Advocacy workstream developed a set of core metrics for companies to disclose, to help investors better understand and identify modern slavery risk. You can read IAST APAC’s core modern slavery metrics here.

These core metrics were used as part of company engagement and shared with number of parties including ESG data and service providers, listed companies, standard setters (e.g., ISSB), stock exchanges, UN bodies, development finance institutions, governments, and civil society organisations – all were encouraged to adopt them. A number of listed companies agreed to disclose this information, and indicated that it was helpful to receive consistent guidance from investors on what information to disclose on modern slavery.

Research and ratings provider ISS ESG mapped the metrics to existing data collection points and is collaborating with a small subset of IAST APAC members to collect the remaining data points for ASX300 companies as part of their 2024 data collection. If this approach is successful, they will roll this data collection out more broadly. Given the important role ESG research providers play in influencing company disclosure, we see this project as an important driver to disclose information that will better support investors to identify modern slavery risks within investment portfolios.

Policy advocacy

In 2023, IAST APAC engaged with a number of policy makers, government departments and standard setters.

Company engagement

During the period 1 July 2022 to 30 June 2023, IAST APAC members reported progress amongst target companies with the biggest change being a shift in the focus of engagement objectives from ‘finding’ to ‘fixing’, as highlighted in our annual report. Members also reported an increase in the progress of individual milestones at target companies.

Information for the period 1 July 2023 to 30 June 2024 is currently being collated.

Knowledge sharing

Walk Free and FAST implement knowledge-sharing events for investors. These events are designed to support initiative collaboration in general, and the investor advocacy and company engagement work-streams specifically. During 2023 and 2024 to date, the Walk Free and FAST delivered events covering the following topics:

• Worker driven social responsibility (April 2023)
• Ausbil Asset Management Bangladesh ESG field trip review (April 2023)
• In-person roundtable with Tomoya Obokata, UN Special Rapporteur on contemporary forms of slavery (May 2023)
• Global Slavery Index overview (June 2023)
• Addressing forced labour in Malaysia (October 2023)
• Australian company progress and engagement update (March 2024)
• Engagement masterclass 2 with a focus on escalation measures (May 2024)
• Responsible AI and modern slavery (June 2024)

Outline the measures to ensure transparency

• Our website provides information on the membership, our workstreams, approach, submissions and publications.
• We also publish policy consultation responses on our website, for example, IAST APAC’s submission to the ISSB.
• You can also read the investor letter to the NZ government  on modern slavery laws and IAST APAC’s letter to the Australian government  on National Victims Compensation Scheme.
• We report annually on progress and challenges, and our reports also include case studies from company engagements.
• Each workstream meets quarterly to share knowledge, updates and information. We have a number of formal and informal knowledge-sharing sessions.

 

PRI disclaimer:

This case study aims to contribute to the debate around topical responsible investment issues. It should not be construed as advice, nor relied upon. It is written by a guest contributor. Authors write in their individual capacity – posts do not necessarily represent a PRI view. The inclusion of examples or case studies does not constitute an endorsement by PRI Association or PRI signatories.

Important information:

Investors Against Slavery and Trafficking Asia Pacific (IAST APAC) is an investor led multi-stakeholder initiative convened to promote effective action among companies in the Asia-Pacific region to find, fix and prevent modern slavery, labour exploitation and human trafficking in their value chains. Membership to IAST APAC is open to any asset owner or asset manager with an office in the Asia Pacific region. This document has been prepared for general information purposes only.

The views expressed in this document are the views of IAST APAC and do not necessarily reflect the views of individuals or members associated with IAST APAC. Such views are subject to change without notice and may substantially differ from the views of individuals or members associated with IAST APAC. To the extent permitted by law, no liability is accepted by IAST APAC nor any members of IAST APAC for any loss or damage as a result of any reliance on this material. This material contains, or is based upon, information that IAST APAC believes to be accurate and reliable, however neither IAST APAC nor any individuals or members associated with IAST APAC offer any warranty that it contains no factual errors.