Important information
Macquarie Group Limited (“Macquarie”) is a global financial services group operating in 31 markets in asset management, retail and business banking, wealth management, leasing and asset financing, market access, commodity trading, renewables development, investment banking and principal investment.
This statement outlines the actions undertaken by Macquarie to identify and mitigate the risk of modern slavery and human trafficking occurring in its business operations and supply chain for the year ending 31 March 2020. This is the fifth report under the UK Modern Slavery Act 2015 and the first report under the Australian Modern Slavery Act 2018 (Cth). It has been prepared as a joint Statement.1
Macquarie supports fundamental human rights as set out in the Universal Declaration of Human Rights and core International Labour Organisation conventions. In line with the UN Guiding Principles on Business and Human Rights, Macquarie recognises the duty of states to protect human rights as well as the fundamental responsibility of businesses to respect human rights.
Modern slavery involves the most serious forms of human exploitation and takes many forms, including: trafficking in persons; slavery; servitude; forced marriage; forced labour; debt bondage; deceptive recruiting for labour or services; and the worst forms of child labour.2 Macquarie is committed to identifying and mitigating the risk of modern slavery and human trafficking occurring within its business operations or supply chain.
For internal reporting and risk management purposes, Macquarie is divided into four Operating Groups and four Central Service Groups. The risk management framework applies to all Operating and Central Service Groups.
Macquarie acts primarily as an investment intermediary for institutional, corporate, government and retail clients and counterparties around the world, providing a diversified range of products and services to its clients.
As at 31 March 2020, Macquarie employed 15,403 people globally of which 96% were active permanent staff. A complete breakdown of employees by region is provided in the FY2020 Employee Composition Data. Further detail on Macquarie’s approach to addressing modern slavery risk across its employees is provided in the Employees section below.
Macquarie’s global corporate procurement in FY2020 involved over 21,000 suppliers across 30 countries and a spend of $A2.6 billion. Its business is primarily office-based with the main supply chain categories comprising technology, premises, financial services, professional services and business travel. Further detail on Macquarie’s approach to addressing modern slavery risk in its supply chain is provided in the Suppliers section below.
As a financial services provider the risk of modern slavery within Macquarie’s direct business operations is considered to be low however Macquarie recognises that it can be indirectly exposed to these risks, for example through its supply chain or client relationships. Macquarie takes a risk-based approach to modern slavery risk in its supply chain, business operations and client relationships. Further detail on Macquarie’s approach is provided in the Business operations and clients section below.
Further information on Macquarie’s business is available in the FY2020 Annual Report and the FY2020 Environmental Social Governance (ESG) Report.
Macquarie has an established set of policies and procedures that govern the way it operates. These are relevant to how Macquarie manages potential human rights related issues with regard to its business operations and supply chain. These include:
The Board is responsible for approving Macquarie’s ESG framework. In accordance with its Charter, the Board Governance and Compliance Committee (“BGCC”) assists the Board in adopting appropriate governance standards and reviewing the operation of environmental and social risk management policies. Responsibility for implementation of the ESG framework and related board approved policies resides with Management.
All staff share responsibility for identifying and managing ESG issues as part of normal business practice. Staff are supported by the Environmental and Social Risk team which sits within the Risk Management Group and has Group‑wide oversight of the ESR Policy.
Macquarie staff and external parties, including suppliers, can confidentially report concerns about improper conduct by Macquarie or suppliers to the Integrity Office, an internally independent and confidential function that oversees Macquarie’s Whistleblower Program. The Whistleblower Program incorporates the Whistleblower policy, guidelines and procedures and provides support and protections to those who report concerns to ensure that they do not suffer detriment as a result of speaking up. In FY2020, there were no reports of slavery or trafficking through the Whistleblower Program.
Macquarie is committed to maintaining a safe workplace that values equal opportunity and is free from discrimination, harassment and victimisation. During the employee onboarding and orientation process, Macquarie offers a series of learning and development activities (including events hosted by the CEO) designed to communicate and embed the Macquarie culture and reinforce the ongoing importance of meeting behavioural expectations and effective risk management across all of Macquarie’s businesses and regions.
Macquarie operates in a highly regulated environment and has robust policies and procedures concerning employment screening (including work eligibility checks), employment conditions (including fair pay and hours) and appropriate workplace behaviour. These policies and procedures apply across all employment types. These policies and procedures are reviewed on a regular basis and explained to staff through regular training.
All staff are expected to abide by the spirit, as well as the strict requirements, of the Code of Conduct and applicable policies and procedures.
In FY2020, Macquarie:
In 2018, Macquarie engaged third-party consultants to complete a detailed supply chain human rights risk diagnostic and used this diagnostic to guide its global approach. The diagnostic was aligned to the UN Guiding Principles on Business and Human Rights, Sedex Members Ethical Trade Audit (“SMETA”) Best Practice Guide and the Ethical Trade Initiative Human Rights Due Diligence Framework. It assessed the implementation of Macquarie’s human rights policy, management systems and controls, and remediation procedures. Based on Macquarie’s supply chain profile, the risk of modern slavery remains relatively low. Recommendations from the diagnostic included further due diligence on suppliers in higher risk jurisdictions and in higher risk industries. This approach is addressed in detail below.
In FY2020, Macquarie:
Macquarie is committed to maintaining collaborative supplier relationships. In FY2020, this included engaging with key suppliers on the impacts of COVID-19 on their operations and where possible, seeking mutually beneficial outcomes for both parties in response to the pandemic. This involved, but was not limited to, extending contracts and supporting suppliers during lockdowns.
As outlined above, since 2018, Macquarie has implemented a risk based ESR assurance programme which involves in-depth onsite assessments with suppliers in high-risk jurisdictions and high-risk industries to test alignment with Macquarie’s Principles for Suppliers. Site visits have been completed to date with suppliers delivering office products, facilities management, construction and technology services in Asia and Australia. Issues identified during the onsite assessments are reviewed and corrective actions with agreed timeframes are issued as part of a remediation plan. Process and documentation gaps identified during the onsite assessments are included as time-bound corrective actions within a remediation plan. To date, no instances of modern slavery have been identified through the completed onsite assessments. However, COVID-19 has impacted planned site visits and existing remediation processes during FY2020. These plans will be reinstated as restrictions ease. Further, Macquarie will continue to take steps to monitor and address the impacts of COVID-19 across its supply chain over the course of the year.
Macquarie manages human rights related issues in transactions and client onboarding under its ESR Policy and Financial Crime Risk Framework.
Macquarie’s ESR Policy establishes processes for identifying, assessing, managing, mitigating and reporting material environmental and social risks, including modern slavery risks, across the business. The ESR Policy includes a due diligence approach intended to identify and manage potential and actual human rights risks, including the risk of modern slavery, in investment decision making and in the screening of new client relationships. The Policy is based on international guidelines including the International Finance Corporation (“IFC”) Performance Standards and utilises Macquarie’s Environmental and Social Risk Assessment Tool (“ESR Tool”) to guide due diligence requirements, including IFC aligned assessment of human rights, labour and employment practices.
Similar to the supplier approach outlined above, the ESR Policy and ESR Tool outline high-risk jurisdictions and sectors based on a range of data sources and indices. Potential human rights issues, including modern slavery risk, are assessed at jurisdiction, sector, client and project levels. Risk categorisation is based on the IFC typology and drives due diligence requirements, impact assessments, escalated decision-making, and implementation of mitigation plans. The ESR Policy requires:
As mentioned above, the ESR Tool provides due diligence support mechanisms designed to assess and manage environmental and social risks (including modern slavery risks) associated with clients and transactions. This includes:
The ESR Policy and ESR Tool set out the approach to structuring due diligence to align with jurisdiction and sector-specific risk. A detailed breakdown of ESR reviews by jurisdiction and sector is provided in the ESG section of Macquarie’s FY2020 Annual Report.
Where applicable, Macquarie’s asset management business also confirms that relevant Macquarie Infrastructure and Real Assets (“MIRA”) portfolio companies within the UK and Australian funds are in compliance with the reporting requirements of the respective Modern Slavery Acts. More information on Macquarie’s human rights approach is available in the ESR Policy summary.
Macquarie’s Financial Crime Risk Framework, incorporating Anti-Money Laundering and Anti-Bribery and Corruption policies, includes procedures for detecting, mitigating and managing the risks of financial crime, including those potentially linked to human rights violations. Any proceeds arising from instances of human trafficking would be classified as the proceeds of crime and managed under the Financial Crime Risk Framework.
In FY2020, Macquarie:
Environmental and social risk training is provided to staff in key risk functions and business groups and covers the ESR Policy and the use of the ESR Tool to support the identification of labour and human rights issues. Environmental and social risk and anti-money laundering requirements are also integrated into online compliance and Code of Conduct training. In FY2019, Macquarie developed and delivered specific training on human rights and modern slavery. The training built technical knowledge of human rights and modern slavery due diligence and risks within the financial services context. It also reinforced Macquarie’s commitment to managing these issues within its businesses and supply chain. This training was updated and continued in FY2020 however COVID-19 has impacted scheduled deliveries as the sessions are interactive and delivered in person.
In FY2020, Macquarie:
Macquarie is active in a number of external initiatives relevant to addressing modern slavery in the financial sector, including:
In FY2020, Macquarie:
Macquarie monitors and reports a range of indicators to assess the effectiveness of its approach, seeking to review and enhance measurement indicators in line with continuous improvement.
Focus area |
Indicator |
FY2020 |
Human rights training |
# of staff completing human rights training (cumulative) |
480 |
# of assigned staff completing ESR and WHS training |
509 |
|
# of staff completing Supplier Governance Policy training |
1,800 |
|
% of central sourcing and third-party risk management staff completing ESR training |
97 |
|
Supplier due diligence |
# of suppliers completing the supplier ESR questionnaire (cumulative) |
800 |
# of suppliers subject to ESR onsite assurance (cumulative) |
18 |
|
Transaction due diligence |
# of ESR reviews of transactions, client onboarding and advisory mandates |
606 |
Reports |
# of reports of slavery or trafficking through the Whistleblower Program |
0 |
Macquarie will review and enhance its approach to addressing modern slavery risks within its supply chain and parts of its business operations by:
Macquarie took a cross-functional approach to preparing and drafting this Modern Slavery Act Transparency Statement. The Board of each reporting entity was given an opportunity to consider and provide comments on the statement prior to publication.
This Modern Slavery Act Transparency Statement was approved by the Macquarie Group Limited Board and will be updated annually. As set out above, the Board of Macquarie Group Limited is ultimately responsible for Macquarie’s risk management framework which applies across the Group.
The Board or governing body of each reporting entity has considered and approved this statement prior to publication.