In a first for Australia, over half of the nation’s ASX100 companies received an ‘A grade’ for modern slavery reporting, according to an annual assessment by the Monash Centre for Financial Studies.
The Centre, which is part of the Monash Business School, recently released its 2024 Modern Slavery Disclosure Quality Ratings, following an independent review of the reporting quality of ASX100 companies’ mandatory modern slavery statements.
The report reveals Australia’s largest companies are increasingly active in dealing with modern slavery in their supply chains.
Rather than simply reporting on risks, companies are taking action and terminating problematic supply relationships, although a majority are still attempting to work through issues.
Almost three quarters (73 percent) mentioned continuing the relationship with suppliers/contractors, with six percent suspending suppliers until issues are fixed. A further 12 percent terminated due to uncooperative suppliers while nine percent did not report on their relationship.
The ratings saw 56 ASX100 statements receive an A grade in relation to modern slavery reporting, out of a total of 112 statements, while 21 percent received a B grade.
This is a significant improvement from the inaugural year of reporting in FY2020, which saw just three percent awarded an A grade and 12 percent awarded a B grade.
More than half of the modern slavery statements have improved by at least one or two grades over the past four reporting periods, when compared with ratings from FY2020.
The report highlighted substantial improvements made by ASX100 companies in key areas of disclosure such as governance, risk assessment, supplier due diligence and collaboration.
Areas for further improvement include providing detailed descriptions of supply chains beyond tier 1, enhancing the identification of risks and exposures in accordance with the United Nations Guiding Principles (UNGP), strengthening disclosure of grievance channels and remediation processes, and detailing how they monitor the effectiveness of their actions in managing these risks with more tangible outcomes and impact.
“The utilities and real estate sectors continue to lead, while the financial and IT sectors lag behind,” said the report.
“However, it is noteworthy that the financials and materials sectors dominate the market in terms of both the total number of companies and the number of top-rated statements.”
Dr Nga Pham, Senior Research Fellow at the Monash Centre for Financial Studies, said assessing the progress of ASX100 companies since the introduction of Australia’s modern slavery reporting obligations in 2020 reveals promising improvements.
“In this year’s report, we aimed to explore a topic that we are frequently asked about: the most effective ways to report social audit findings and disclose specific instances of modern slavery or, if not modern slavery itself, exploitative labour practices identified that could serve as early indicators of such issues,” she said.
“Companies’ commitment to supply chain due diligence appears to reflect a broad focus on engagement and corrective action, with a majority demonstrating a willingness to work with suppliers to address issues rather than resorting to punitive measures.
“This commitment highlights a preference for fostering continuous improvement and building ethical supply chains.”
PASA recently reported on the appointment of former Labor Minister Chris Evans as the inaugural Australian Anti-Slavery Commissioner.
Evans commenced a five-year term on 2 December 2024 that will see him focus on further strengthening the work undertaken across government, business and civil society to prevent and respond to modern slavery.
He will support victims and survivors, raise community awareness and help businesses to address the risk of modern slavery practices in their operations and supply chains.
