Preventing modern slavery in our supply chain and the supply chains of our investments

In what has been an unprecedented time over the past 12 months, our highest priority at IFM continues to be the safety and wellbeing of our global team, the people who work at our investments, and members of the communities in which we invest and operate. Our focus on people and community encompasses the safe and fair conditions for working people and inclusive communities. It also includes modern slavery.

‘Modern slavery’ refers to human and labour rights violations, which the International Labour Organisation estimated were inflicted on as many as 40.3 million people across the globe at any given time in 2016.¹ The value of products imported by G20 countries each year that are at risk of being produced under modern slavery conditions is estimated to be as much as US$354 billion.²

IFM stands against all forms of forced labour and is committed to preventing modern slavery and human trafficking from occurring within our supply chain and the supply chains of our investments.

Our progress and our planned next steps in this area are outlined below in an excerpt from our 2020 Responsible Business Report.

Beyond the ethical imperative to prevent modern slavery, we recognise the potential investment risks associated with a failure to protect the labour and human rights of working people. These risks relate to unsustainable business models, and the costs of reputational and brand damage and regulatory changes. We believe managing modern slavery risks is essential to protecting investment value and returns over the short, medium and long term.

We are required to publicly report on the risks of modern slavery in our corporate and investment activities as legislated under the Modern Slavery Act (UK) 2015 and Modern Slavery Act (Australia) 2018. We do this via annual Anti-slavery and Human Trafficking Statements, which we publish on our website.

Our progress during FY20

Building on work undertaken in previous years, our approach has focused on mapping and understanding the entire supply chains of the businesses and organisations we procure from and invest in.

Key activities we have undertaken to build our capability to identify and manage modern slavery risks include:

• Providing a guidance note to IFM directors with appointments on investee company boards to support their understanding of legislative requirements, particularly under the Modern Slavery Act 2018 (Commonwealth Act), and their responsibilities as directors; and

• Creating a centralised procurement function, which included the recruitment of a dedicated procurement manager. We also updated sourcing documents to support our people involved in the process of engaging suppliers.

We also engaged a third party advisor to map the modern slavery risks within our corporate supply chain and the supply chains of our directly-held Private Equity, Infrastructure and Australian listed equities investments. An approximate supply chain mapped to ten tiers was produced for each entity. This referred to the industries and geographies in which they operate, with a focus on the top three tiers to indicate associated modern slavery risk levels. Identifying and assessing our risks in this way has provided us with an appreciation of where the most significant risks lie and where our future activities and efforts can be focused.

Next steps

We have carefully considered our short, medium and long-term plans to mitigate modern slavery risks, and we are continuing to improve our approach to addressing these risks. In financial year 2020/21 and beyond, we will continue work on integrating modern slavery risk considerations into our investment and procurement life cycles and raising awareness of modern slavery and our collective responsibility within our organisation.

We will also continue to collaborate with our peers through initiatives such as Investors Against Slavery and Trafficking Asia-Pacific (IAST APAC), an investor-led initiative that has been convened to promote effective action among companies to find, fix and prevent modern slavery, labour exploitation and human trafficking. In October 2020, IFM was a signatory to the coalition’s investor statement, which outlined investor expectations of companies reporting under the Australian Modern Slavery Act. During 2021, we will undertake collaborative engagements with IAST APAC members, focusing on companies based in the Asia-Pacific region in key industries.

IAST APAC members include the Australian Council of Superannuation Investors (ACSI), Australian Super, Aware Super, Cbus Super, Christian Super, Hesta and VFMC.

¹ https://www.ilo.org/global/topics/forced-labour/lang--en/index.htm

² https://www.globalslaveryindex.org/2018/findings/highlights/. G20 trade figure does not include South Africa or the European Union.