Working conditions in supply chains remains a challenging issue that spans virtually all sectors and geographies. Some recent cases include:
- Operators of the UK government’s Seasonal Worker Scheme were found to be lacking in effective due diligence. Workers arriving at UK farms, having spent thousands of pounds in illicit recruitment fees.
- In October 2022, the US government announced that it considers lithium-ion batteries – critical for products from smartphones to electric vehicles – as likely to be tainted by forced labour due to conditions in cobalt and copper mining.
- Research by the Business and Human Rights Resource Centre shows a rapid deterioration of working conditions in the apparel industry in Myanmar.
As investors, we need to understand how investee companies are deploying effective due diligence to manage risk appropriately. Lack of clear disclosure can make this challenging, but with the right questions we can gain important insights into strategy and effectiveness through engagement dialogue.
Interested in learning more?
Regulatory requirements are increasingly stringent, and companies need to adopt a robust approach to risk assessment and monitoring. We outline our take on best practices and our engagement activities. Download the full ESG Viewpoint to discover more.