ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), announced the launch of its Modern Slavery Scorecard, which enables investors to identify, evaluate and prioritize modern slavery risks in their global portfolios and supports their modern slavery and supply chain related reporting. The scorecard provides a holistic assessment of modern slavery risks in operations and supply chains, preparedness to address those risks, and links to modern slavery controversies.

Against a backdrop of rapidly evolving human rights transparency and due diligence frameworks, both required and voluntary, investors face increasing disclosure expectations regarding their investments. Regulatory developments on modern slavery and supply chains have already been introduced or are being considered in more than ten jurisdictions across North America, Europe and Asia-Pacific. The ISS ESG Modern Slavery Scorecard helps investors to assess portfolio exposure to modern slavery and report on geographic, industry and product risks; integrate granular data on risk, disclosure and performance, and controversies into in-house assessments to inform due diligence processes; and identify modern slavery controversies and laggard performing companies for engagement.

The Modern Slavery Scorecard is powered by data and insights sourced from three industry-leading ISS ESG solutions, the ESG Corporate Rating, Norm-Based Research and the ESG Country Rating. It assesses 25 quantitative and qualitative factors developed by ISS ESG’s modern slavery and human rights specialists. As of June 2022, the Modern Slavery Scorecard covers approximately 7,400 issuers globally and the universe is growing on a regular  basis to meet client demand.

To further support investors seeking to increase their impact, and comply with voluntary and statutory stewardship requirements such as SFDR, country-based stewardship codes, PRI reporting and SRD II, ISS ESG’s Thematic Engagement Solution enables participation in joint outreach and dialogue with a select list of target companies, facilitated by ISS ESG. ISS ESG’s Modern Slavery Thematic Engagement seeks to improve companies’ commitment to prevent modern slavery and strengthen their modern slavery risk monitoring and mitigation through worker voice and engagement in two high risk supply chains groupings: food and healthcare. The engagements focus on both buyers and suppliers, as addressing systemic forced labor risks requires concerted effort and collaboration and change along the supply chain. Forty companies have been identified for engagement on modern slavery issues in the next two-year engagement cycle.

Dr. Maximilian Horster, Head of ISS ESG said: “With human rights transparency and due diligence regulatory frameworks evolving rapidly, ISS ESG’s Modern Slavery Scorecard helps investors improve their risk management and stewardship of this important area.”

Source: ISS