ISS ESG, the sustainable investment arm of ISS STOXX, announced today the launch of its enhanced Modern Slavery solution, aimed at helping investors monitor and report their risks around modern slavery in their portfolios.

According to ISS ESG, the launch comes as investors face ongoing scrutiny regarding portfolio holdings involved in controversies such as forced and child labor and human trafficking, with the solution aimed at supporting risk management by identifying portfolio exposure to modern slavery-related risks and allows investors to benchmark portfolio companies against their industry peers.

The new solution is an enhanced version of one ISS ESG released in 2022. Key features of the enhanced solution include a scorecard and portfolio report powered by an expanded dataset sourced from ISS ESG solutions, the ESG Corporate Rating, Norm-Based Research, and the ESG Country Rating, along with external sources such as the US Department of Labor. The solution also assesses 25 quantitative and qualitative factors developed by ISS ESG’s modern slavery and human rights experts, and it allows investors to benchmark portfolio companies against their industry peers.

As of June 2024, the Modern Slavery solution covers approximately 60,000 issuers globally in its risk assessment section and 8,000 issuers are covered by all sections of the report.

Till Jung, Head of ISS ESG said:

 “The new launch is timely in light of improving corporate modern-slavery and supply-chain related disclosure in markets such as Australia, the United Kingdom, Canada,  France, the Netherlands, Germany and Norway, driven by significant regulatory developments in recent years. The modern slavery solution’s new reporting functionality allows clients to upload their portfolio and download a report which details their risk exposure and also demonstrates how their holdings are managing modern slavery risks.”

According to ISS ESG, further use cases for the Modern Slavery solution include supporting investors’ due diligence by integrating the granular data into in-house assessments and helping investors to identify high-risk and poor-performing companies for engagement.