How the Financial Industry Can Help Stop Modern Slavery

Modern slavery is a lucrative business that can’t exist without the financial system. Yet the financial industry is largely ignorant of the problem. Asset managers have an important role to play in challenging poor practices that allow this social evil to persist.

Forced labor, debt bondage and human trafficking victimize more than 40 million people worldwide each year. Governments and companies are increasing efforts to combat many forms of human exploitation in business operations and supply chains across industries from mining to agriculture to retail. Yet, in every sector, modern slavery has one thing in common—it’s driven by the massive profits reaped from taking advantage of vulnerable people.

Financial Firms Are Exposed

Disrupting the money flow is perhaps the best way to curb the scourge. But many people don’t see the financial services sector as sharing responsibility for fighting modern slavery, while the industry itself doesn’t see it as a high priority issue (Display). In a 2020 survey of UK financial institutions, 43% of board level directors didn’t know about their firm’s modern slavery policy while more than two thirds of employees hadn’t heard much of the issue from management.

Raising awareness starts with acknowledgment. Many people think modern slavery isn’t really a problem in developed economies. Not true. Companies across the developed world manufacture products and source materials in countries where exploitation is endemic. Trace the source of the electronic components in your phone, the fabric in your clothes or the ingredients in your food, and you can find vulnerable women and children, migrant workers and minorities toiling for puny wages, often in inhuman conditions. And in developed countries, too, large numbers of people can be found living and working in conditions of modern slavery.