15 Oct Leveraging the Financial Sector to End Modern Slavery and Human Trafficking
Sustainable finance and environmental-social-governance (ESG) standards are starting to gain traction in Singapore. In 2015, the Association of Banks in Singapore released its Guidelines on Responsible Financing, requiring banks to incorporate ESG criteria in lending and risks assessments. In 2017, the ESG Integration Results of Singapore’s major banks DBS, OCBC and UOB showed progress. As of 2018, the Singapore Exchange mandates all listed companies to produce annual sustainability reports. Already worth an estimated $31 trillion, the global ESG investment market is set to grow given findings that millennial investors are twice as likely to invest in companies that incorporate ESG practices.
Recognising the financial sector’s reach and influence over global businesses and the economy, accelerating engagement by the regional financial sector in tackling modern slavery and human trafficking can deliver a real and measurable impact. As a global financial hub, Singapore is well placed to make a difference.
The SIIA’s work on Sustainable Finance
With an established sustainability network, the SIIA has in recent years also sought to deepen its work in the area of sustainable finance. In partnership with the UN Environment Inquiry and with the support of the Association of Banks of Singapore and the Monetary Authority of Singapore, the SIIA led the Collaborative Initiative on Green Finance in Singapore and issued a report on the topic at the end of 2017. At the end of 2019, with the support of HSBC Bank, the SIIA will release a report on financing sustainable infrastructure projects in ASEAN.
“It is a natural progression for the SIIA to expand its ESG engagement network and research framework to include the social aspects of sustainability,” said Associate Professor Simon Tay, Chairman of the SIIA and Associate Professor of International Law at the National University of Singapore.
Professor Tay has also been elected as one of 25 Commissioners on the United Nations Liechtenstein Initiative for a Financial Sector Commission on Modern Slavery and Human Trafficking (the FSC). Notably, the SIIA is the only Asian think tank represented at the FSC.
Chaired by Fiona Reynolds, CEO of the Principles for Responsible Investment network, the FSC is a public-private partnership between the Governments of Liechtenstein, Australia and the Netherlands, a consortium of philanthropic foundations and private sector institutions as well as the United Nations University Centre for Policy Research. It was launched in response to calls from the G7, the G20 and the UN for governments to partner with the private sector to address modern slavery and human trafficking.
A Blueprint for the Financial Sector to fight Modern Slavery and Human Trafficking
On 27 September 2019, the FSC released its final report titled ‘A Blueprint for Accelerated Financial Sector Engagement in Fighting Modern Slavery and Human Trafficking’. The Blueprint is the culmination of work spanning from September 2018 to 2019. During this period, the FSC held four global consultations and more than 100 informal consultations with its stakeholders. It offers concrete recommendations that the financial sector can use to tackle the US$150 billion modern slavery and human trafficking industry under five main goals:
- Increasing compliance with laws against modern slavery and human trafficking;
- Strengthening risk-identification capabilities and developing better risk indicators;
- Promoting collaboration and the creative use of leverage to mitigate and address risks;
- Providing and enabling effective remedy for victims; and
- Investing in financial innovation tools as a prevention strategy.
The Blueprint also has an accompanying Implementation Toolkit which helps the wide range of financial sector stakeholders take action to end modern slavery and human trafficking.
With the launch of the Blueprint, the FSC will cease to operate as a Commission and instead transform into the Liechtenstein Initiative for Finance against Modern Slavery and Human Trafficking, a multi-stakeholder membership-based initiative. For more information on the FSC and the Initiative, please visit this link.