Modern slavery in data: more than just a number

Macquarie Systematic Investments team is taking a data-driven approach to modern slavery risk by engaging with investee companies to improve disclosure and performance.

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Modern slavery1 can occur in every country, industry and sector. There are an estimated 50 million people affected by modern slavery, which translates to one in every 150 people in the world.2

This is a financial issue as well as an ethical one: companies which find modern slavery in their supply chains can face significant legal, regulatory, operational and reputational impacts as a result. But it can be difficult to uncover, particularly along global supply chains. Adding to its complexity, every company will take a different approach to managing its modern slavery risks, depending on the nature of its operations, locations and supply chains. Modern slavery regulation also varies around the world, and company policies and reporting on the issue are still evolving.

For a boutique listed equities team within Macquarie Asset Management, the challenges of inconsistent reporting of modern slavery risks present an opportunity to engage directly with investee companies to encourage greater transparency around their management and reporting.


The Macquarie Systematic Investment (MSI) team specialises in applying quantitative techniques to its investment processes.

As a shareholder in over 1,000 stocks globally, the team relies on company and market data to guide its investment decision-making.

To address the gaps in modern slavery reporting, MSI undertook 40 direct engagements with investee companies in the year to March 2023 to improve the quality and comparability of information going into its investment model. During these discussions, the team asked investee company management teams a series of questions, including how they are assessing modern slavery risks in their business and supply chains, how their modern slavery policies and practices are supporting people at risk, and which practices are most effective at mitigating, identifying, and rectifying modern slavery issues.

In addition to information gathering, MSI also used these collaborative forums to encourage greater transparency around the companies’ modern slavery disclosures.


The findings from MSI’s company engagements on modern slavery have helped improve the scope of data available on which investment decisions are made by identifying additional data points to consider.

By scoring individual investee companies on their modern slavery risk, and their management and reporting of these, the team has also been able to identify specific companies that require closer monitoring and further engagement to track their progress.

MSI has also noted a willingness among many investee companies to improve their modern slavery disclosures and management practices.3 As an example, one company established worker grievance hotlines in multiple languages to encourage more reporting of modern slavery incidents. Meanwhile, another investee company has chosen to directly hire seasonal workers rather than using a labour hire agency, allowing greater transparency over the recruitment process. MSI has also seen an investee company undertake supply chain mapping to understand where its raw materials are being sourced and to assess compliance with its ethical sourcing program. This investee company audits suppliers and, where necessary, will engage with them closely on corrective action plans to help bring improvements to workers in the supply chain. 


meetings discussed modern slavery in the year to March 2023


sectors covered

Modern slavery is a significant human rights issue which is difficult to measure. By directly engaging with companies, we’re able to improve the quality of our investment data, as well as encourage improved transparency and disclosures.”

Scot Thompson
Co-Head of Macquarie Systematic Investments
Macquarie Asset Management

  1. 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, In accordance with the International Labour Organisation Convention No. 182 concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour.
  2. ‘Global Estimates of Modern Slavery Forced Labour and Forced Marriage’, p.10, Walk Free, International Organization for Migration and International Labour Organization, September 2022.
  3. While these improvements have been observed in these investee companies, it is difficult to draw a direct correlation between MSI’s engagement activities and the target investee company’s actions as MSI generally makes small, non-controlling investments.  

Macquarie Asset Management FY23 Sustainability Report

At Macquarie Asset Management, we view sustainability as part of our fiduciary duty to protect and grow our clients’ assets. This focus also helps us generate positive outcomes for our investee companies and the communities they serve. Our latest Sustainability Report outlines the progress we have made over the past financial year.