Navigating Modern Slavery Compliance

As one of Canada’s economy’s engines, TSX and TSXV issuers are now at the vanguard of a significant legislative shift: the Canadian Fighting Against Forced Labour and Child Labour in Supply Chains Act. This transformation magnifies our core belief at Shift Critical – that sustainable growth is inseparable from good environment, social and governance (ESG) performance.

Canada’s Modern Slavery Act is transformative because it compels companies to examine their entire supply chains for the risk of child labor and forced labor, not just at the direct Tier 1 level where the risk of modern slavery is most pervasive and difficult to detect.

This article dives into the essence of this change and why it marks a critical step forward in in the realm of corporate sustainability and ESG disclosures.

Modern slavery, including forced and child labour, isn’t a distant echo of the past; it’s a pervasive reality that, according to the most recent data from Walk Free afflicts nearly 50 million people across the globe. Significant is that 27.6 million of those in modern slavery are trapped in forced labor, with data suggesting that (63%) of all forced labour happens in the private economy.

These statistics do not merely represent abstract figures – they reflect the lived experiences of millions of people whose fundamental human rights are being violated. This stark reality creates a jarring dissonance in the fabric of our modern world, and it is a challenge that demands informed, decisive action.

The Act establishes a clear legal requirement for annual reporting on efforts to identify modern slavery in their supply chain, which goes beyond a mere compliance exercise. It serves as a call to action for entities to thoroughly assess and actively manage the risks of forced and child labour within their operations and supply chains.

It’s important to recognize that due diligence isn’t merely a legal safeguard, but a strategic imperative. It’s about doing the right thing unambiguously and consistently.

Assessment: The first step to solving a problem is recognizing there is one. For this, a thorough supply chain assessment is vital, employing targeted risk indicators to identify vulnerabilities—geographical hotspots, industry/product-specific risks, and the nuances of employment practices that may enable these exploitative conditions.

Action: Risk identification is followed by prompt and precise action. It involves swiftly addressing potential/existing modern slavery infractions within a company’s operations and collaborating with suppliers to rectify those within the extended supply chain.

Accountability: The annual reporting legal requirement is due by the 31st of May.  This isn’t just about accountability to the rule of law but to the very people impacted by modern slavery. How companies report reflects our ethical compass and our commitment to transparency.

Advancement: As the global understanding of this issue continues to evolve, so must our strategies to address the risk of modern slavery. This is about helping companies continually improve by expanding the scope of their due diligence systems and processes, supplier engagement strategies and remediation efforts (if required).

The Act presents an opportunity to raise industry standards and to create competitive advantage. At Shift Critical, we recognize that true leadership is measured not just by market share, but by our global impact. Our approach goes beyond mere compliance – it is about proactive leadership.

In collaboration with Position Green, we have developed a comprehensive, AI-powered risk assessment tool to help our partners evaluate the risk and likelihood of modern slavery within their supply chains. This innovative dashboard is designed to enable businesses to navigate the complexities specific to Canada’s Modern Slavery Act.

Our dashboard processes large amounts of data to pinpoint forced and child labour risks within the supply chains. It equips companies with key features:

These tools help companies make smart, data-backed decisions and develop strategies to address their risks, ensuring they meet the requirements of Canada’s Modern Slavery Act.

Shift Critical also provides thorough staff and Executive/Board-level training on Canada’s Modern Slavery Act. [read more here]

Our training draws on best practices emerging from other jurisdictions and provides a comprehensive overview of modern slavery and its implications for Canadian businesses. Our customized training modules are designed to help staff secure an understanding of this new law and how to identify and address forced and child labour risks.  It is concise and intuitive, and the focus is on practical guidance for participants.

With Shift Critical’s pioneering modern slavery dashboard, coupled with our educational training programs, organizations are not just responding to the Act, they are transforming it into a strategic competitive advantage.

At Shift Critical, we illuminate the path toward a resilient, future-proof business model by identifying and managing ESG risks. This strategy secures investor confidence and enhances enterprise value, preparing you to flourish in a business world where the intangibles, like corporate ethics and governance, are as significant as financial metrics.

As we witness the implementation of Canada’s Modern Slavery Act, the journey towards a more accountable and transparent business environment is gaining pace. Shift Critical, augmented by AI technology and educational rigor, positions itself – and our partners – at the vanguard of this critical transformation.