Managing modern slavery risks in our investments

We’ve recently published our fifth annual Modern slavery statement, which confirms our approach and commitment to address modern slavery risks across our investment portfolio and in our own operations.

What do we mean by 'modern slavery’?

Modern slavery refers to the severe exploitation of other people for personal or commercial gain. It's when offenders use coercion, threats or deception to exploit victims and undermine their freedom. It’s a significant and complex global issue; it’s estimated that over 49.6 million people worldwide could be living in modern slavery.¹ Modern slavery laws aim to protect workers from these situations.

Approach to modern slavery in our investments

As an active investor, we consider key environmental, social and governance (ESG) factors relating to our investments. Modern slavery is one of UniSuper’s focus areas—we recognise the detrimental impact it has on workers as well as the potential risk it poses to the earnings sustainability of businesses we invest in.

As we manage over 70% of our investments in-house, we’re able to engage with our major Australian investments on a range of ESG issues including modern slavery where relevant. We prioritise engaging with companies operating in areas identified with higher modern slavery risks (e.g. construction). By engaging with companies, either directly or in collaboration with other investors, we can understand their approach to identifying modern slavery risks and their processes to manage these risks. Where we use external managers to invest on UniSuper’s behalf, we select and monitor them carefully.

In July 2023, we engaged an external specialist, FairSupply, to complete a modern slavery risk assessment across our listed equities portfolio. This indicated that over 89% of this portfolio’s exposure was in industries rated as having a ‘Low’ or ‘Moderate-Low’ modern slavery risk.²

We are always trying to improve how we understand and address modern slavery risks in our investments. In 2024, we engaged an external consulting firm, Pillar Two, to identify gaps in our methodology and reporting. This year, we’ll continue incorporating its recommendations.

Managing risks in our supply chains

Modern slavery risk is also a key consideration when selecting businesses to supply goods and services to us. These include external investment managers, data providers, suppliers of office equipment, and many others. When seeking external suppliers or signing contracts with them, we selectively assess their potential modern slavery risk with regard to both spend and perceived level of modern slavery risk. If one of our suppliers is classified as high-risk, it brings about a more thorough modern slavery risk evaluation, and we’ll look to negotiate modern slavery provisions into our agreements. Although most of our Tier 1 suppliers are in Australia, where risks are likely to be lower, we do expect all suppliers to abide by our Supplier Code of Conduct.

More information?

In our 2024 Modern slavery statement, we’ve included easy-to-understand country maps which show the levels of modern slavery risk across various countries we invest in and procured our goods and services from. Read the Modern slavery statement for more in-depth information. You can also download some of our other publications from our responsible investment policies and reports page.