Modern Slavery Statement
Modern Slavery Interim statement
What Schroders is doing about Modern Slavery
Modern slavery remains a widespread issue across the globe with an estimated 40 million* men, women and children living in modern slavery at any given time. There is no universal definition of modern slavery, but it encompasses human trafficking, forced or bonded labour, as well as forced marriage, child labour, servitude and deceptive recruitment for labour/services. Usually, it involves coercion, threats or deception to exploit victims and deprive them of their freedom. As a global organisation, Schroders is strongly opposed to slavery and human trafficking. We will not knowingly support or conduct business with any organisation involved in such activities.
Headquartered in London, we have reported under the UK Modern Slavery Act since 2016 detailing the progress that the Schroders Group (“Schroders” or the “Group”) has made and our plans to prevent slavery and human trafficking from taking place in our business and supply chains.
Locally in Australia, we are working on implementing the obligations stemming from the Australian Modern Slavery Act which commenced on 1 January 2020. In this regard we are active amongst industry working groups as well as collaborating with our London counterparts. Under the Act, we are required to produce a Modern Slavery Statement which reports on the risks of modern slavery in our overall business and investment operations and supply chains and will outline our approach to addressing those risks. Given our reporting period is 31 December, we will have our first Modern Slavery Statement ready by 30 June 2021, however we are working closely with our clients to assist them with their reporting requirements ahead of this date. We will also be providing updates to this interim statement periodically.
We aim for high standards of governance throughout our organisation and corporate responsibility is of primary importance to us. We recognise the responsibility we have towards our clients and other stakeholders, including our employees and society as a whole.
*International Labour Organisation (ILO) as at September 2017
Schroders is a global asset management organisation operating across 32 locations including Europe, the Americas, Asia Pacific, Africa and the Middle East and employing over 5000 people. We manage assets on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world. Schroders plc is the ultimate holding company of the Schroders Group with its head office based in London and over 200 subsidiaries globally, including the Sydney-based Schroder Investment Management Australia Limited (“Schroders Australia”). Find out more about Schroders here.
Our direct workforce is predominantly made up of professionally qualified and skilled employees and we consider the risk of modern slavery occurring amongst our employees to be low. We are a living wage employer and have committed to meeting the living wage for all our Australian-based employees and where applicable, we expect our suppliers to adopt the same principle. All new employees must comply with our employee handbook, which sets out that we expect the highest standards of ethics and integrity and makes clear that we oppose all forms of unfair discrimination or victimisation.
Our ethical standards
We promote high ethical standards and have an internal Whistleblowing Policy whereby employees can raise any suspected concerns regarding unethical behaviour or decisions that could indicate potential wrongdoing. A 24-hour hotline is available to employees to anonymously report any concerns and this is publicised widely. Due diligence is undertaken before entering a new client relationship and this is enhanced in high-risk countries.
We recognise that training is crucial to raising awareness of issues around slavery including how to spot signs of trafficking and where to report concerns.
We provide specific training to our global procurement team and other employees involved in the management of our suppliers and we have training modules on modern slavery and human trafficking available to all employees through our online training platform.
Our supply chain
Schroders relies on the use of third parties to support high quality, effective and efficient delivery of our services to clients and we expect all of our suppliers to operate in a responsible, ethical, open and transparent way and in compliance with all applicable laws and regulations. As an asset management firm with supply chains predominantly comprising business and professional services organisations, we believe that there is limited risk of slavery or human trafficking taking place. The vast majority of our major suppliers are headquartered in low risk countries and in the coming year, we plan to collect a more granular geographic breakdown of our supply chains. We undertake robust due diligence on all material suppliers and establish on-going performance measurement to monitor, review and manage these relationships.
We take a risk-based approach to supplier management and classification with criteria which includes business impact of failure, service complexity, regulatory requirements, brand/reputational impact and contract length used to determine appropriate on-going contract and performance management activities. We rely on third parties to support high quality, effective and efficient delivery of our services to clients. We expect all of our suppliers to operate in a responsible, ethical, open and transparent way and in compliance with all applicable laws and regulations.
Further details on our global supply chain and how we seek assurance and commitment from our suppliers to comply with the Schroders Supplier Code of Conduct, as well adhere to the requirements of the UK Modern Slavery Act, are available in our global statement on modern slavery and human trafficking here.
We undertake robust due diligence on all our material suppliers and establish on-going performance measurement to monitor, review and manage these relationships. Our due diligence process now includes a specific human rights risk assessment as a measurement criteria to be used during the selection process for new suppliers.
Material suppliers are reviewed twice a year in line with our policies and this includes assessment against service levels, operational risk, compliance with regulation, business continuity and contractual obligations.
The output from the bi-annual due diligence reports and other relevant market information is collated into a service provider risk report for review by the Board Audit and Risk Committee.
Due diligence is undertaken before entering a new client relationship to ensure compliance with Know you Client (KYC) and Anti-Money Laundering (AML) regulations, and this is enhanced in countries that have been labelled as high-risk due to known corruption or other ethical concerns.
Integrating environmental, social and governance (ESG) analysis into our fundamental investment processes is a core part of how we generate long-term sustainable value for our clients. Modern slavery and companies' management of their workers and suppliers more broadly are becoming increasingly important to our analysis of the companies in which we invest. We play an active role through our stewardship activities in encouraging ESG considerations.
We have conducted more than 2,200 engagements across 52 countries, prioritising weak performers and large exposures. Modern slavery and human rights in addition to other topics such as climate change and bribery and corruption were covered.
Globally, we have examined the risks across our holdings in high-risk sectors. Consumer companies are most exposed to modern slavery but those with robust supply-chain management strategies are likely to be best placed as the spotlight becomes brighter.
We have assessed the public disclosure of a number of our UK holdings against regulatory requirements for Modern Slavery disclosure and found strong levels of compliance. As attention on this topic grows and transparency improves, we will continue to strengthen our assessment of business practices and engage with companies where we believe tougher action is needed.
Our central sustainability team, based in London, has opened up engagement with 54 FTSE 100 firms to encourage more transparency and seek reassurance that they are identifying and mitigating potential risks in their supply chains. We currently have ongoing discussions with over 30 companies on this issue. We have already received some positive and encouraging responses from several companies.
Locally, we are actively monitoring the new regulatory developments with regards to Australia’s Modern Slavery Act across our Australian-based investment desks along with the subsequent reporting requirements.
Where Schroders Australia has delegated investment management to either an internal or external investment manager, or where we offer global products managed by Schroders’ global specialist teams, we are continuing to work with them to understand the requirements for reporting from an investment standpoint under the Act. We are also working with external industry working groups, along with our UK colleagues, to better understand our obligations and how best to meet these obligations in a way that meets both the regulatory and industry expectations.
In line with the reporting obligations of the Australian Modern Slavery Act 2018, Schroders Australia is not required to issue our formal statement until June 2021. However, we are very conscious that our clients must also provide an annual statement disclosing the risks of modern slavery within their operations and supply chains and outline the actions taken to address these risks. As such, we are working closely with our client base to assist with their reporting obligations and envisage punctuating the above deliverable with several interim updates as we work through the assessment of modern slavery risks across our business well ahead of this date. In line with this, we will continue to canvas our service providers and work towards strengthening our own assessment of modern slavery risks across our supply chain and investment universe.
We have issued this statement to provide an update on our status towards implementing our obligations under the Australian Modern Slavery Act.
If you would like further information, please contact our Client Services team on 1300 136 471 or email firstname.lastname@example.org.