Question to the Home Office:

To ask the Secretary of State for the Home Department, what steps her Department is taking to encourage institutional investors to consider modern slavery risks inherent in wider investment portfolios under the Modern Slavery Act 2015.

Under the landmark transparency provisions contained in section 54 of the Modern Slavery Act 2015, the UK became the first country in the world to require certain commercial organisations to report annually on the steps they have taken to prevent modern slavery, including institutional investors who fall within scope of the requirement.

The Government regularly engages with businesses, investors, civil society and industry experts to collaborate on best practice and promote key measures to tackle modern slavery. The Home Office’s statutory guidance, ‘Transparency in Supply Chains: a Practical Guide’, emphasises that it is crucial that large organisations are transparent and accountable, not just to investors but to other groups including employees, consumers and the public, whose lives are affected by their business activity. The Government also supports ShareAction’s Workforce Disclosure Initiative (WDI) and provided £200,000 of funding in 2020/21. The initiative has mobilised investors with $6.5 trillion of assets under management to call for transparency from multinational companies on how they manage their workforce.

In the meantime, to further enhance transparency, in March 2021 the Government launched an online GOV.UK registry for modern slavery statements. This new service enables investors, consumers, NGOs and others to scrutinise the effectiveness of the actions being taken and monitor progress across sectors over time. Within the first month of launching, statements covering c. 8,000 organisations have already been submitted to the registry.

If an organisation fails to publish a statement, the Secretary of State can seek an injunction to require compliance. This power has not been used to date. However, following the transparency in supply chains consultation, the Government has committed to an ambitious package of changes to section 54, including introducing financial penalties for organisations who fail to meet their statutory obligations to publish annual modern slavery statements. These measures require primary legislation and will be introduced when parliamentary time allows.