Unseen Laborers: Addressing Modern Slavery in 2021

Modern slavery remains entrenched in supply chains, even as regulatory and social pressure on companies to find, identify and eliminate the practice increases. New anti-slavery rules are creating compliance concerns and reputational risks for companies. Investors are trying to understand the legal obligations facing companies to measure and report on their risk of being implicated in the use of forced labor. This paper examines the regulatory landscape, compares requirements of anti-slavery regulations, evaluates exposure of companies in the MSCI ACWI Index to these regulations and flags companies most exposed to both regulatory and supply chain risks.

Reporting Requirements for Countries Covered by Modern Slavery Regulations

Gray area is approximate proportion of the MSCI ACWI Index market capitalization covered by modern slavery regulations at the time of implementation (% on secondary y-axis). Sources: MSCI ESG Research, company disclosure. MSCI ACWI Index as of Feb.1, 2021