ESG in Depth: Modern Slavery and Forced Labor (MFS)

In this edition of ESG in Depth, we discuss the issue of modern slavery and how to identify and evaluate the increasing risks facing many companies.

Problem: Modern slavery and forced labor remain a rampant problem in today’s world. Companies in various industries have experienced modern slavery issues in their operations and supply chains and, while many companies have taken some steps to address it, the problem persists.


Development: In recent years, a number of countries and jurisdictions have implemented regulations intended to force companies to address the problems of modern slavery and child labor. However, Australia’s new modern slavery law moves beyond company responses to this problem and requires investors to report on modern slavery risks within their portfolios. To comply with this law, asset managers will now be required to publish annual statements outlining how the risk of forced and child labor is evaluated and eliminated from their business operations and investment portfolios. MFS analysts and portfolio managers should expect to field questions from Australian clients about our research and processes in this area. Clients in other regions may soon follow suit.

Materiality: The potential risks related to modern slavery are increasing due to…

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