Investment Patterns and Leverage

Recently, investors have joined the ranks of stakeholders championing the need for a more humane form of capitalism, highlighting their key role at the “top” of supply chains and the significant influence they wield among business actors. There is growing momentum around ESG investing – a focus not only on financial gain, but also the environmental, social, and governance impacts of doing business. Yet, there is no agreed-upon, established set of standards to guide this process, and social issues are consistently de-prioritized over environmental ones in company disclosures. This brief investigates how investment patterns can be leveraged to combat forced labour, putting social considerations and labour standards front and centre. We examine how changing patterns of investment – including the financialisation of the global economy and concentration of corporate ownership – are creating structural constraints on labour costs and driving the use of forced labour, often via outsourcing and subcontracting, in ways that undermine companies’ own anti-trafficking commitments. We lay out a series of recommendations to correct these trends and identify meaningful action investors could take to promote decent work.