How modern slavery accountability gives you a competitive edge
Businesses across the globe have had a lot on their plates in the 2020s. For some, modern slavery accountability - whether legislated or not - is still perceived as one more onerous regulatory hurdle or box-ticking exercise.
Viewing modern slavery accountability through a pure compliance lens may mean you're missing out on a serious competitive edge. Socially conscious consumers increasingly make purchase decisions based on ethical practices, with searches for sustainable goods surging by 71% in the past five years.
Global brands caught up in modern slavery can find themselves victims of cancel culture by consumers and investors demanding they do better. As a result, ethical procurement is no longer purely a compliance issue – it's a key part of a sustainable business strategy.
Consumers pushing for accountability
Sustainability is big business. Consumers will pay more for ethically sourced goods and are more likely to switch between brands to find one that demonstrates a commitment to ending modern slavery. That's commitment and public accountability, not just compliance.
There’s a whole lot of market share at risk if your company gets entangled with an unethical supplier. As soon as we talk revenue, modern slavery accountability tends to climb the list of priorities.
On the other hand, there’s a carrot as well as a stick. Authentic modern slavery awareness and accountability is an opportunity to sharpen your competitive edge and attract a substantial share of the market.
Cancel culture catches out companies
If you remember the Nike scandal of the 1990s, you’ll appreciate the reputational damage modern slavery can cause to even the biggest brands.
Patrick Shiels, Senior Account Executive at Robobai, said recent global brand incidents illustrate the consequences of paying lip service to modern slavery in your supply chain.
“A global PPE manufacturer was recently found in breach of forced labor laws in Malaysia. Factory workers were living in shipping containers,” he said.
This revelation resulted in one of their suppliers being slapped with a US import ban and fresh scrutiny of their operations.
“For many organizations, especially publicly listed companies, ethical investors are forcing transparency across the supply chain,” Patrick said.
“A lot of super funds and a lot of private equity will only align themselves with organizations with great ESG credentials. Organizations trying to attract new investors need to manage their reputation with real action.”
Visibility and transparency: The supply chain new must-haves
Visibility and transparency are the best tools we have to fight modern slavery. There's nowhere for unethical practices to hide with no blind spots in a supply chain. But a clear view of the entire supply chain is a challenge for many organizations.
“It might be that an Australian business is using a trading company in China, but that trading company in China is purchasing from a panel of factories,” Patrick explains.
“It becomes a very complex scenario; organizations need to ramp up their processes and engage with third-party specialist providers to identify risk through various lenses.”
Know Your Supplier with a 360-degree view
Identifying risks goes beyond asking your suppliers to provide a modern slavery statement. That’s a good start - but every business needs a 360-degree view of suppliers.
Robobai has three critical risk lenses:
“Our platform supports customers to identify suppliers operating in high-risk jurisdictions, that have a high propensity to have questionable practices, or contribute to high-risk products and services,” said Patrick.
“We also use the global Dow Jones Adverse Media and Sanctions content to flag breach notifications within the platform so organizations can take immediate action.”
Modern slavery accountability demands the right technology
As supply chain complexity grows alongside regulatory and consumer pressure, the onus is firmly on organizations to eliminate modern slavery.
Identifying emerging risks in their supply chain can be costly, time-consuming, and almost impossible to manage without the right tools.
Patrick points out that risks may not necessarily exist with their first-tier supplier.
“It might be in your second-tier supply chain which becomes a lot harder to measure and identify,” he said.
“The right technology platform streamlines the process of identifying supplier risk and provides data and insights to help protect your organization.”
How Robobai protects your supply chain from modern slavery risk
The Robobai platform empowers a three-step process.
1. Identifying risk by examining the supplier, the country they operate in, and their category of goods or services.
2. Engaging with suppliers through modern slavery statements, questionnaires, and asking for more information.
3. Use supplier intelligence to act on reducing risks of modern slavery. Identifying risk doesn't mean immediately cutting ties with a supplier - it can provide the opportunity to start the conversation that helps make real change.
With access to advanced supplier insights and analytics, organizations can hold themselves accountable, maintain compliance with legislation and keep their competitive edge.
Under the Modern Slavery Act 2018, large businesses and other entities in the Australian market need to submit annual Modern Slavery Statements to the Australian Government’s Online Register for Modern Slavery Statements.