In December 2024, the UK Court of Appeal ruled that allegations of forced labour and abuse at Malaysian factories supplying Dyson could be heard in the UK.  The case was brought by 23 migrant workers, and the estate of a deceased worker, from Nepal and Bangladesh, who allege forced labour, false imprisonment, assault and battery over periods as long as nine years.

Dyson argued the case should be heard in Malaysia, but the court cited the vast power imbalance between the vulnerable claimants and Dyson as a key reason to proceed in the UK. The Supreme Court has since refused Dyson permission to appeal.

50m people… and rising

The alleged experiences of these workers are not isolated. Walk Free and the ILO estimate there are 50 million people around the world trapped in modern slavery, of which 28 million are in forced labour. Alarmingly, the numbers are increasing.

A wide variety of goods, from tinned tomatoes and solar panels to consumer electronics and textiles, are often tainted with forced labour. Annually, the UK imports US$26.1 billion in products at risk of being made using forced labour, according to the Walk Free Foundation. Meanwhile, the estimated profits generated from forced labour globally are $236 billion a year. The profits from forced labour incentivise further exploitation, strengthen criminal networks, encourage corruption, and weaken the rule of law. Forced labour and modern slavery are unfortunately features of our contemporary system, not a bug.

Given the global estimates and the wide variety of goods affected, we at CCLA believe it is likely that there is forced labour in the supply chains of most businesses. Companies therefore need to be proactive in understanding and assessing the risks, putting mitigating measures in place, and rectifying the harm to victims before it becomes a matter of concern for the courts.

As investors, we see growing expectations on business to tackle forced labour in their operations and supply chains via new legislation and regulations. In 2022–23, CCLA saw this first hand as one of our portfolio companies had $50 billion of solar infrastructure plan put in jeopardy when their solar panels were stopped from entering the US market.

The company involved had to collaborate closely with their suppliers to secure goods that met the new standards under the forced labour ban. This was a two-year endeavour that required considerable time, resources and investment. Being proactive in rooting out forced labour is both a moral obligation and financially prudent decision-making for companies.

As investors, we have been working to address modern slavery since 2012. In 2019, we created ‘Find it, Fix it, Prevent it’, an investor coalition with 65 members and £19 trillion in assets under management to engage companies on this issue.

Gauging and engaging

More recently, we have been benchmarking the largest companies by market capitalisation in the UK on their approach to modern slavery and the degree to which they disclose finding, fixing and preventing forced labour in their modern slavery statements and human rights disclosures.

This year, we have extended this approach to the top 100 global companies (by market capitalisation) having an operational footprint in the UK and thus subject to UK Modern Slavery Act. These are some of the most influential companies in the world, from Apple and Amazon to Saudi Aramco and McDonald’s.

Modern slavery, by its nature, is hidden and difficult to detect, but it is endemic. If companies are conducting robust human rights due diligence, they are likely to find cases or indicators of forced labour. Our research showed many companies had policies that align with the UN Guiding Principles on Business and Human Rights (72% in the UK benchmark and 80% in the global benchmark). But putting these policies into practice means developing robust discovery mechanisms and providing redress to victims when and where they are found.

In the UK benchmark, only 27% of companies disclosed finding cases. In the global benchmark, the proportion was lower still, at just 24%. Given the prevalence of modern slavery in the global estimates, we think that companies are either not looking hard enough or not disclosing cases. Still fewer disclosed the outcome of how they sought to address the harm caused to victims—18% in the UK benchmark and just 14% in the global benchmark.

This gap between policy and practice is important for investors. The benchmark results are a reminder that investors are scrutinising business performance on forced labour. We, along with the many investors we collaborate with, are interested in the effectiveness of companies’ practices, rather than simple compliance.

Boards must move beyond box-ticking and ensure due diligence efforts are genuinely uncovering and addressing harm. As the legal and financial stakes rise, so too does the imperative for robust, transparent and effective action. Investors and companies have a responsibility to ensure that we are not profiting from the exploitation of vulnerable people and, if we work together, we can tackle this crime and contribute to building a more equitable world.

Martin Buttle is Better Work lead at CCLA Investment Management