The IAST APAC initiative is an example of collective investor stewardship. In particular, it involves the use of a number of ways to influence companies and other stakeholders:
Investors joining IAST APAC can contribute to two work streams. The first work stream is focused on contributing advocacy and sharing information for improved modern slavery risk management and modern slavery incident response. The second work stream focuses on engagement with companies in the Asia-Pacific region.
The first work stream (work stream 1) initially focused on publishing and distributing an investor statement that set out investor expectations regarding company action to assess and address modern slavery going beyond the requirements of the Australian Modern Slavery Act. The investor statement was published in September 2020. It was sent to ASX100 companies in November 2020 and the remainder of the ASX200 in June 2021.
“Ausbil has a history with engagements on modern slavery as well as other human rights issues and as a member of the steering committee of IAST APAC, we believe collaborative engagement can be an effective way to address this systemic risk. As the investor statement outlines, modern slavery is more than an ‘ethical issue’; we believe any business model or supply chain that relies on underpaid workers, weak regulation or even illegal activities like modern slavery cannot produce sustainable earnings.”
Head of ESG Research, Ausbil Investment Management Limited
Work stream 1 is now exploring supporting advocacy to strengthen regulation and share information for improved modern slavery risk management and incident response. As knowledge partners, Walk Free and FAST assist with knowledge events to inform IAST APAC investors of regulatory developments and supply chain risks.
The second work stream (work stream 2) is the collaborative investor-company engagement work stream. The focus is collaborative engagement by IAST APAC investors with specific focus companies in the Asia-Pacific region. Collaborative engagement aims to maximise leverage, generate efficiencies and build knowledge. Investors can join this work stream as either a lead or support investor, within small group collaborations that engage the different focus companies selected from four initial sectors:
Extractives will be the next focus sector added, at a later date.
As knowledge partners, Walk Free and FAST assist with knowledge events to inform IAST APAC investors of supply chain tools and risks.
“Modern slavery is a complex issue that requires a coordinated approach at many levels. Ultimately, there is one KPI that matters: have you found modern slavery in your operations or supply chain? By finding, fixing and preventing it together, we are much more likely to achieve positive change.”
Responsible Investment Specialist, First Sentier Investors