Financial instruments were utilised many centuries ago to support transatlantic trade for items such as sugar, cotton and most tragically, slaves. Merchants found the trade across the Atlantic, while lucrative, was slow and unreliable. As a solution, they issued credit notes that could travel relatively quickly and safely across the seas in exchange for the 'goods' such as slaves. In addition, plantation owners borrowed money to finance their expansion by using slaves as collateral.
Fast forward a few hundred years and while such practices would be deemed as outrageous, 'modern' forms of slavery still exist in various forms along operational and supply chains.
Some have claimed that slavery was a key element in developing financial markets, such as the evolution of banking practices in both the US and the UK. Others, such as the Lichtenstein Initiative for Finance Against Slavery and Trafficking Others (FAST), will assert that it was the innovations of the financial sector that led to the eventual abolishment of slavery in the 1830s. What can be concluded is that the financial sector has an obligation to help combat modern slavery.
Contrary to some market commentary that questions if modern slavery still exists, modern slavery has an estimated worth of US$150 billion each year and occurs in every region of the world according to the International Labour Organization (ILO). The ILO estimated that on any given day in 2016, there were 40.3 million victims of modern slavery globally, of which 71% were women and girls.
Walk Free, a global organisation established by the Minderoo Foundation with a mission to end modern slavery, estimated that there were up to 15,000 victims living in Australia. Figure 1 highlights some of the key findings of research conducted by the ILO and Walk Free.
The drive to tackle modern slavery through investments
The Responsible Investment Association Australasia (RIAA) in its research: From Values to Riches Charting consumer attitudes and demand for responsible investing in Australia, November 2017, surveyed a small group of Australians to ascertain their interests and engagement for social and environmental issues when making decisions on their investments in superannuation and other financial products.
RIAA found that 92% of the respondents expected their superannuation or other investments to be invested responsibly and ethically.
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