IAST APAC progress update (July 2021)
IAST APAC (Investors Against Slavery and Trafficking Asia Pacific) was launched in 2020 as an investor initiative to promote effective action by companies to find, fix and prevent modern slavery, labour exploitation and human trafficking across the value chain.
The initiative is strictly open to investors only and has a steering committee of First Sentier Investors (chair), AustralianSuper, Aware Super, Fidelity International, Ausbil Investment Management Limited, and the Australian Council of Superannuation Investors (ACSI). The secretariat of the initiative is provided by Walk Free in partnership with the Liechtenstein Initiative for Finance Against Slavery and Trafficking (FAST). IAST APAC currently represents AU$7.7 trillion (US$5.7 trillion) in funds under management across 34 members in June 2021.
The initiative is divided into two work streams. The first work stream centres on an investor statement on modern slavery. This statement outlines investors’ expectations and encourages companies to go over and beyond the legal requirements of the Australian Modern Slavery Act (2018). It also suggests and encourages companies to take a number of specific actions based on best practice to combat slavery effectively. The investor statement was initially sent to all the companies listed in the ASX100 in late 2020. Of the responses, 33 per cent acknowledged the investor statement – and, in the majority of those responses, companies welcomed further engagement with the initiative.
In 2021, in conjunction with the end of Australian financial year deadline for the reporting requirement under the Modern Slavery Act and widespread evidence of increased risk of modern slavery globally in the wake of the COVID pandemic, an updated investor letter was sent to the ASX100 companies who had not replied; and to the remaining 100 companies listed in the ASX200.
Many of the specific points raised in the investor statement are linked to the second work stream, which focuses on engagements with specific companies. Twenty-three companies were selected from four sectors – consumer discretionary, consumer staples, technology, and healthcare – as engagement priorities. Work has begun on those engagements, including establishment of engagement plans with specific objectives and milestone targets – and, in some cases, engagement with the companies has started. In addition, a number of workshops were held for members, including sharing best practice on engagement and key priorities for engagement reports. Looking ahead, investors will be using the engagement plans for multi-year engagements with the selected companies and continue to share knowledge and best practice. It is envisaged that the work under this work stream can also assist members to address the mandatory criteria of measuring the effectiveness of actions taken, under the Modern Slavery Act, by tracking progress against the engagement plan.
IAST APAC is strongly focused on industry collaboration – in the spirit of the Modern Slavery Act – including shared knowledge and tools to address risk, taking inspiration from the investor initiative ‘Find it, Fix it, Prevent it’ in the UK. It also engages with civil society, including Walk Free and FAST, as well as investor briefings on specific risks by labour rights experts.