Leverage is all about using influence in relationships to change outcomes. The force of finance lies in its ability to act as a lever by which the systemic performance of the entire global economy can be moved.
When a company is connected to modern slavery and human trafficking through its business relationships it is expected to use its leverage to seek to prevent or mitigate that harm and, where necessary, build additional leverage.
Citi has created an internal watchlist process that allows them to flag clients that present potentially severe risks to human rights. Citi increases its leverage by using this process to engage with flagged clients on how to improve their practices and advise on ways to improve their behaviour and human rights performance.
ESG requirements for banks adopted by the Central Bank of Vietnam.
ESG requirements for banks adopted by the Central Bank of Peru.
ESG requirements for banks adopted by the Central Bank of Nigeria.
ESG requirements for banks adopted by the Central Bank of Mongolia.
Deloitte increased its leverage by creating an assessment tool to assess modern slavery risks in its client’s supply chains. Deloitte then worked with the client to roll out training and a communications strategy to mitigate these risks.
Provenance is leading a collaboration of fintech startups to test whether blockchain technology can help unlock financial incentives that improve transparency and sustainability in agricultural supply chains. The group, which includes Landmapp, FOCAFET Foundation and Halotrade will be working with Barclays, BNP Paribas, Standard Chartered, DfID and others to enable financial institutions to broaden the scope of their financing offers and to propose financial incentives to their customers, clients, based on their environmental and social standards.
Western Union, Stop the Traffik, Barclays, Lloyd’s Banking Group, Liberty Global, Europol and University College London have partnered together to launch TAHub, an international data hub that uses machine learning and structured data to identify the characteristics of human trafficking incidents. facilitate the exchange of information about human trafficking across organisations. By training the hub over time, it will improve in accuracy and likely develop predictive capabilities.
The London Metal Exchange will only allow responsibly sourced metals to be traded from 2022, in line with rising demand from consumers and investors for sustainable products. Under the new rules, producers operating in high-risk areas or conflict zones will need to meet international guidelines on responsible sourcing or face being delisted from the exchange. These rules would implement standards which are consistent with, or build upon, the OECD Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
The London Stock Exchange Group built its leverage through developing written guidance for all listed companies on ESG reporting and providing targeted webinars. The written guidance emphasizes that the UK Modern Slavery Act (2015) is a key ESG reporting regulation that listed companies should comply with.
The London Stock Exchange Group uses its leverage to incorporate anti-slavery commitments into their supplier contracts and seeks to agree contracts with suppliers, which align to their minimum standards. These include cross-jurisdictional anti-slavery provisions such as the requirement for the supplier to comply with all applicable laws including the UK Modern Slavery Act 2015, agreement to the Supplier Code of Conduct, to warrant that its staff and officers have not been in any way involved in slavery or human trafficking and have sufficient procedures to ensure there is no slavery in any of its businesses or supply chains and provides LSEG with rights to audit their operations and businesses.
ESG requirements for banks adopted by the Central Bank of Brazil.
