Modern slavery is the latest incarnation of the old “child labour sweatshops” and “working conditions of suppliers” crises that have been hitting corporations since Nike and The Gap in the 1990’s. However, the term “modern slavery” has created a shift, moving it from medium-term to urgent on corporate risk registers. In May this year, I read that Adidas recruited a dedicated person to fight slavery, and it was this which prompted me to write this article.
The fact is, it is terrifying, morbid, disgusting, and unequivocally unacceptable to have slavery in today’s age. Any company’s name with slavery connected to it crashes down into a dirty murky territory. It not only brings up impressions of a lack of ethics, but it throws into doubt the company’s ability to conduct due diligence, manage risks, and govern properly. It can even create suspicion in the quality of the product, trust of the leadership, and the long-term outlook of the company.
A reputation like this can scare away talented employees, long-term investors, and valuable customers. Compared to the business case for other supply chain sustainability issues (like deforestation, which I wrote about in my last post), this one is obvious, explicit, and raw. Governments are aware of this; the UK has a “Modern Slavery Act”, Australia is developing its own, and it is one of the United Nations Sustainable Development Goals.
Adidas are tackling modern slavery head on with an ambitious programme. As shared in a Thomson Reuters Foundation piece from May, Adidas became aware of this issue at the 1998 FIFA World Cup where it was revealed that child labour in India was used to make soccer balls. Adidas’ programme is focused on partnerships with non-governmental organisations and government to identify and mitigate risks in the second and third tiers of its supply chain, processing and raw materials. Uniquely, Adidas is striving for direct engagement with the employees of these supply chain companies. Apps, messaging and phone hotlines enabled workers to send anonymous concerns, questions, suggestions, etc. Even better, data is being collected and analysed for more strategic opportunities.
While this is a stretch for most organisations, there are some areas to start:
- Run a corporate presentation on the 2016 Global Slavery Index, and in it run a comparison of high risk countries against the countries in your supply chain. E.g. if you are in apparel and your supply chain touches Uzbekistan, look out!
- Produce a “heat map” by charting potential social and environmental risks in your supply chain, and then rating them on a severity scale.
- Ask for more information from your suppliers. Run a site visit, interview employees, enquire about salaries (if you can), and look favourably on whistleblower programmes and other mechanisms for bottom-up feedback.