Socially Responsible Investing and Human Trafficking By Ethel Howley, SSND
Can we SSNDs make our finances work for people and the planet?
We are at a point in time where both our people and our planet face severe challenges, including 40 million people living in situations of modern slavery and people being displaced due to climate change. Consequently, it is vital that investors in some of the world’s most influential companies be able to identify whether these companies are capitalizing in strategies having negative impacts on human rights and sustainable development, or contributing to prevention and mitigation of these impacts.
Because we, SSNDs, have been called to “risk innovative responses . . . in a rapidly changing world impacted by globalization and technology,” I am working with other investors at the Interfaith Center on Corporate Responsibility (ICCR) to push corporations to focus attention on social issues, particularly human rights and human trafficking. This filing season, we filed human rights and trafficking resolutions with 43 companies. I participated in dialogues with executives of six other companies on upholding or violating human rights in their supply chains.
Often in this world of globalization, many job-seekers have been the victims of unscrupulous labor recruiters who bait and switch, promising well-paying jobs but, once the worker arrives at the new job site, renege on those promises. Wages are extremely low or withheld for no reason, documents and passports are confiscated, and fees are charged for transportation and lodging. All this amounts to enslavement. Foreign workers and migrant workers, particularly in the agricultural and fishing sectors, are especially vulnerable to slave labor.
Within the Automobile Industry, we have focused on child labor, forced labor and unsafe working conditions in the supply chains. Since each car has 30,000 parts, there are extensive supply chains within this industry, located in several African and Asian countries. Every one of the corporations uses cobalt for batteries, mica for car paint, rubber for tires, and leather for seating. Very young children, who ought to be in school or daycare, are exploited to work in the industry which produce these elements for us. These industries are toxic and unsafe. Local governments, that could protect these children, do not enforce any of their labor laws.
This can be a reminder that the articles we buy have been on a long journey before ending up in our hands. The supply chain begins with the raw material and advances through production, distribution, consumption, and finally disposal – or from the farm to the fork. This is how we can easily become unconscious consumers of products made by child labor.
In Caritas in Veritate, Pope Benedict reminded us, “It is good for people to realize that purchasing is always a moral and not simply an economic act. Hence the consumer has a specific social responsibility which goes hand-in-hand with the social responsibility of [the business].” (66)
The United Nations “Guiding Principles on Business and Human Rights” provides shareholders and other stakeholders with an important accountability framework to assess and address corporate performance on the full range of human rights related to human trafficking and modern day slavery. These Guiding Principles also provide guidance for a company regarding the human rights impact of its work. The principles can also help a company to address its human rights violations in a transparent way.
Sexual exploitation of women and children is the other aspect of Human Trafficking addressed by socially responsible investors. ICCR members have engaged companies in the travel and tourism sector encouraging hotel chains and airlines to adopt and implement policies designed to address sexual exploitation within their operations. This process, spearheaded by ICCR members, has led these corporations to provide awareness training for their employees who interact with customers. This training gives information into the signs of possible human trafficking activity, what the employees need to look for when they become suspicious of certain individuals, and what is the next step for them to take.
Over the past two years, Marriott International has trained 600,000 employees on how to spot the signs of human trafficking. All new hires are taught these signs as well. In addition, posters are there to remind employees and raise awareness. Every department in the hotel has different types of signs to look for. The global director of social impact for Marriott International, said: “It’s definitely not just one sign that leads to trafficking.”
It is now clear, that the front line of stopping sex trafficking could be at the front desk. Some people in the hotel industry think the state may soon require all hotels to train their staffs to recognize the signs of a trafficking victim.
More recently, the Information and Technology Companies (IT) have received a great deal of publicity from critics for their lack of oversight against sexual exploitation of children which often leads to trafficking of the victim. Our engagements with a company include how they enforce their existing policy and an assessment of the effectiveness of their efforts to combat child sex exploitation through their products and services. Also, we raise the issue of how its policies and practices are sufficient to prevent any impacts on the company’s reputation or its products.
Our expectations as socially responsible investors are presented to the corporate executives in each dialogue. We indicate that companies need to conduct on-going impact assessments to identify human rights risks in their operations and supply chains and address how findings are incorporated into programs and remediation plans. Understanding the impacts and risks of trafficking and slavery, we believe will help companies design effective training programs and human rights monitoring.
Pope Francis reminds us in Laudato Si’: “Politics and business have been slow to react in a way commensurate with the urgency of the challenges facing our world.”(165) “To stop investing in people, in order to gain greater short-term financial gain, is bad business for society.” (128)
At the 2019 meeting of the Migrants and Refugees Section of the Vatican Office for Promoting Integral Human Development, several recommendations concerning the Church’s response to Human Trafficking were put together.
I am highlighting those which had already been a focus for SSND engagements with many corporations and governments:
- Working for corporate responsibility in ensuring supply chains are free from slave labor;
- Working against child labor;
- Opening the eyes of consumers to the risk of supporting slave labor when purchasing very cheap projects;
- Advocating a greater opening of legal channels of migration; and fostering development projects in countries of departure so migration is a choice, not a necessity.
While speaking with church leaders at this meeting, Pope Francis used words from Gospel of John to describe the church’s mission, “I have come that they may have life and have it in abundance.”