The role of financial sector actors in eradicating contemporary forms of slavery

Financial sector actors may cause, contribute or be directly linked to contemporary forms of slavery through their operations, products or services, or through their business relationships. For example, their products and services can be used to generate and launder illicit profits generated from contemporary forms of slavery. They may also invest in or finance businesses that engage, directly or indirectly, in practices amounting to contemporary forms of slavery. Yet financial actors have an unparalleled ability to influence companies and to use their leverage.

In the present report, the Special Rapporteur on contemporary forms of slavery, including its causes and consequences, highlights international norms and principles on the obligations of States, as well as the responsibility of financial sector actors. He then identifies promising practices, remaining challenges and gaps in legislation, policies, and operations and practices. He concludes by providing actionable recommendations to combat contemporary forms of slavery more effectively.

States are under a general obligation to prevent third parties such as financial sector actors from abusing human rights, including the rights to work and to just and favourable conditions of work guaranteed under the International Covenant on Economic, Social and Cultural Rights. In line with the Guiding Principles on Business and Human Rights,¹ States should adopt “a smart mix” of mandatory and voluntary measures to foster business respect for human rights, including by financial sector actors. The Working Group on business and human rights in this regard stressed the importance of including financial sector actors in national action plans and other policies relating to business and human rights, including actions against contemporary forms of slavery.²

1. A/HRC/17/31, annex. ↩
2. A/HRC/56/55, para. 31. ↩

With regard to mandatory measures, the Committee on Economic, Social and Cultural Rights has recognized the positive duty of States to adopt a legal framework to compel all businesses to exercise human rights due diligence to identify, prevent and mitigate the risks of human rights abuses.³ For such measures to be effective, clear and sector-specific, guidance for financial sector actors should be provided by taking into account the specific characteristics of different types of financial actors.⁴

3. See Committee on Economic, Social and Cultural Rights, general comment No. 24 (2017) on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities, para. 16. ↩
4. See principle 3 of the Guiding Principles; and A/HRC/56/55, paras. 32 and 88. ↩

As part of their duty to protect against business-related human rights abuses, States must take appropriate steps to ensure – through judicial, administrative, legislative or other appropriate means – that those affected have access to effective remedy. This includes conducting thorough investigations when financial actors are allegedly involved in situations amounting to contemporary forms of slavery, and imposing appropriate criminal, civil, administrative and other appropriate penalties and sanctions.⁵ For remedies, a variety of reparations – such as restitution, apologies, financial or non-financial compensation, and rehabilitation – can be considered through both judicial and non-judicial mechanisms.⁶

5. See Committee on Economic, Social and Cultural Rights, general comment No. 24 (2017), paras. 15 and 40. ↩
6. Ibid., paras. 41 and 51–57. ↩

There are additional legal obligations. For instance, States must prevent illicit financial flows generated from contemporary forms of slavery.⁷ In this regard, the United Nations Convention against Transnational Organized Crime obliges them to take effective actions against money-laundering. Human rights mechanisms have also recognized the negative impact of illicit financial flows on the realization of human rights, and therefore an obligation to trace and confiscate criminal proceeds generated from contemporary forms of slavery can be established under international human rights law.⁸

7. See CEDAW/C/LIE/CO/5/Rev.1, para. 25; Security Council resolution 2331 (2016), para. 6; and Security Council resolution 2388 (2017), para. 7. ↩
8. See A/76/170, para. 43. ↩

Promotion of financial inclusion among potential and actual victims of contemporary forms of slavery is also important. Adequate access to affordable financial services, including their digital forms, can promote decent work and economic growth as recognized in target 8.10 of Sustainable Development Goal 8, which is closely interlinked with target 8.7. While international human rights instruments do not specifically mention financial inclusion, such an obligation has been recognized from the existing obligations, especially in the context of elimination of discrimination.⁹

9. See CEDAW/C/ARM/CO/7, para. 40; and CRPD/C/ARG/CO/2-3, para. 42. ↩

In relation to the right to work, it has been recognized that the promotion of employment opportunities requires, among others, non-discriminatory access to financial services,¹⁰ and States must also take appropriate financial measures to protect the right to just and favourable conditions of work.¹¹ Financial exclusion has a negative impact on other rights, such as the rights to education, social security and an adequate standard of living, which will increase the risk of contemporary forms of slavery. Therefore, financial inclusion is a human rights obligation for States to fulfil.

10. See Committee on the Rights of Persons with Disabilities general comment No. 8 (2022) on the right of persons with disabilities to work and employment, para. 39; and A/HRC/43/45, para. 19. ↩
11. See Committee on Economic, Social and Cultural Rights, general comment No. 23 (2016) on the right to just and favourable conditions of work, para. 50. ↩

International and regional financial institutions, including the World Bank and regional development banks, should play their part in preventing contemporary forms of slavery. In this regard, the Committee on Economic, Social and Cultural Rights has repeatedly called upon States to pay closer attention to the protection of human rights, including the rights to work and to just and favourable conditions of work, in influencing their lending policies, credit agreements, structural adjustment programmes and the international measures of these institutions, and also called upon States to ensure that any polices or programmes adopted on the ground promote human rights.¹² A similar point was emphasized by the Committee on the Rights of the Child.¹³ Principle 10 of the Guiding Principles also affirms States’ obligations to protect human rights when they act as members of multilateral institutions, including international and regional development financial institutions.¹⁴

12. Ibid., para. 71; and general comment No. 18 (2005) on the right to work, para. 53. ↩
13. See Committee on the Rights of the Child, general comment No. 16 (2013) on State obligations regarding the impact of the business sector on children’s rights, para. 47. ↩
14. See A/HRC/53/24/Add.4. ↩

The Guiding Principles apply to international and regional financial institutions. In this regard, human rights considerations should be integrated into all aspects of development projects.¹⁵ For example, such financial institutions should scrupulously avoid supporting or participating in projects that involve the use of forced labour in contravention of international standards.¹⁶ The Committee on the Rights of the Child has also highlighted the need for these institutions to establish procedures and mechanisms to identify, address and remedy violations of children’s rights.¹⁷ These should include child labour, particularly its worst forms, as stipulated in the International Labour Organization (ILO) Worst Forms of Child Labour Convention, 1999 (No. 182).

15. Committee on Economic, Social and Cultural Rights, general comment No. 2 (1990) on international technical assistance measures, para. 8. ↩
16. Ibid., para. 6. ↩
17. See Committee on the Rights of the Child, general comment No. 16 (2013), para. 48. ↩

The Guiding Principles apply equally to private financial sector actors. Their responsibilities include having in place human rights policies and human rights due diligence mechanisms to identify, prevent, mitigate and account for adverse human rights impacts, as well as establishing processes to enable the remediation of adverse impacts.¹⁸

18. Guiding Principles, principle 15. ↩

Human rights due diligence should cover not only the impacts that financial sector actors may cause or contribute to through their own activities, but also those that may be directly linked to their operations, products or services through their business relationships, including downstream business relationships with investee companies, project partners, clients and other entities.¹⁹ Throughout the process, meaningful engagement and consultation with affected groups and their representatives, including workers, trade unions, civil society and local communities, should also be conducted.²⁰ Furthermore, using a human rights-based approach to risk management aligned with the Guiding Principles, priority consideration could be given on the basis of severity and likelihood of potential human rights impacts.²¹

19. Ibid., principle 17. ↩
20. Ibid., principle 18; see also A/73/163, para. 14. ↩
21. See A/HRC/56/55, para. 59. ↩

In order to mitigate the risks of contemporary forms of slavery, financial sector actors should integrate their impact assessments across internal functions and processes, including decision-making on investment, lending or other financial services, and take appropriate action.²² 22 Where financial sector actors cause or contribute to an adverse impact or are directly linked through a business relationship, they should use their leverage to mitigate any such adverse impact to the greatest extent possible.²³ 23 For example, financial sector actors may engage directly with investees, borrowers or any clients of financial services so that they can modify their business practice.24 14 See A/HRC/53/24/Add.4. 15 Committee on Economic, Social and Cultural Rights, general comment No. 2 (1990) on international technical assistance measures, para. 8. 16 Ibid., para. 6. 17 See Committee on the Rights of the Child, general comment No. 16 (2013), para. 48. 18 Guiding Principles, principle 15. 19 Ibid., principle 17. 20 Ibid., principle 18; see also A/73/163, para. 14. 21 See A/HRC/56/55, para. 59. 22 Guiding Principles, principle 19. 23 Ibid., and commentary. 24 See A/HRC/56/55, para. 66. 6/21

22. Guiding Principles, principle 19. ↩
23. Ibid., and commentary. ↩

As an action of last resort, divestment or any other form of disengagement can be considered when the leverage by financial sector actors does not have the desired effects. However, a careful assessment must be conducted as to whether such disengagement may result in further adverse impacts on the ground, as it may not be appropriate in all cases.²⁵ Financial sector actors should also track the effectiveness of their policies and actions, especially focusing on impacts on victims.²⁶ Finally, in order to account for how they address the risks of contemporary forms of slavery, financial sector actors should communicate their action externally.²⁷

25. Ibid., para. 71. ↩
26. Guiding Principles, principle 20. ↩
27. Ibid., principle 21. ↩

Financial sector actors that have caused or contributed to an adverse human rights impact, including contemporary forms of slavery, should provide remedies or cooperate in their remediation through legitimate processes.²⁸ Where they are directly linked to adverse human rights impacts through business relationships with investees, borrowers or any other entities, financial sector actors should exercise their leverage in order for those entities to provide effective remedies.²⁹ Furthermore, financial sector actors should establish or participate in effective operational-level grievance mechanisms.³⁰ Such grievance mechanisms should reflect the criteria prescribed in principle 31 of the Guiding Principles, such as legitimacy, accessibility, predictability, equity and transparency and stakeholder engagement, to ensure their effectiveness in practice.

28. Ibid., principle 22. ↩
29. See A/HRC/56/55, para. 76. ↩
30. Guiding Principles, principle 29. ↩

Consideration of slavery-related risks within disclosure frameworks plays a crucial role in enabling financial sector actors to fulfil their responsibility to respect human rights. The modern slavery laws of Australia (the Modern Slavery Act, 2018), Canada (the Fighting Against Forced Labour and Child Labour in Supply Chains Act, 2023) and the United Kingdom of Great Britain and Northern Ireland (the Modern Slavery Act, 2015) are examples of disclosure-based regimes that require businesses, including financial sector actors, to publish annual statements detailing efforts to identify, prevent and mitigate risks relating to contemporary forms of slavery in their operations and supply chains. Elsewhere – such as Hong Kong, China; Thailand; Türkiye; and the European Union – mandatory environment, social and governance disclosure provisions are being introduced that include corporate reporting on contemporary forms of slavery or related issues, such as trafficking in persons, forced labour, child labour and fair labour practices across the value chain.³¹

31. See https://sseinitiative.org/sites/sseinitiative/files/publications-files/sse-fast-walkfree-modern-slavery-2023.pdf, p. 6. ↩

Despite these efforts, several key challenges remain. For example, financial sector actors often provide incomplete disclosures on human right risks, including slavery-related risks, due to a lack of detailed laws or guidance for disclosures.³² A lack of effective monitoring and enforcement mechanisms, and lack of adequate penalties also reduce the effectiveness of the disclosure schemes in actually identifying and mitigating the risks of contemporary forms of slavery. These 25 Ibid., para. 71. 26 Guiding Principles, principle 20. 27 Ibid., principle 21. 28 Ibid., principle 22. 29 See A/HRC/56/55, para. 76. 30 Guiding Principles, principle 29. 31 See https://sseinitiative.org/sites/sseinitiative/files/publications-files/sse-fast-walkfree-modernslavery-2023.pdf, p. 6. 32 Inter-Agency Coordination Group against Trafficking in Persons, “Issue Paper: Sustainable Finance and Trafficking in Persons” (Vienna, 2024), p. 14. situations lead to a lack of reliable and verifiable data, which is important for the decision-making of financial sector actors.

32. Inter-Agency Coordination Group against Trafficking in Persons, “Issue Paper: Sustainable Finance and Trafficking in Persons” (Vienna, 2024), p. 14. ↩

However, efforts are being made to tackle these shortcomings. The Stock Exchange of Thailand has pioneered the “Guidance on Modern Slavery Risks for Thai Businesses”, establishing the first specific disclosure guidance on contemporary forms of slavery.³³ The Sustainable Stock Exchanges Initiative is currently creating a model guidance on modern forms of slavery as a template for stock exchanges, and the Inter-Agency Coordination Group against Trafficking in Persons has also issued recommended metrics for disclosing the risks on trafficking.³⁴ In addition, revision of the Global Reporting Initiative topic standards – specifically standard 408 on child labour (2016) and 409 on forced or compulsory labour (2016) – as well as its Sector Standards Project for Financial Services, is under development.

33. See www.walkfree.org/resources/guidance-on-modern-slavery-risks-for-thai-businesses/. ↩
34. Inter-Agency Coordination Group against Trafficking in Persons, “Issue paper”, annex 1. ↩

Instances of contemporary forms of slavery often occur alongside other human rights abuses. Initiatives aimed at improving data reliability within a broader human rights context are encouraging. For example, the Taskforce on Inequality and Social-related Financial Disclosures is developing a global framework for companies and financial sector actors to include within their public reports more transparent disclosures about impacts, dependencies, risks and opportunities related to social issues, including inequality. The Special Rapporteur also welcomes the development of standards on human capital management by the International Sustainability Standards Board.³⁵

35. See www.ifrs.org/projects/work-plan/human-capital/. ↩

At the same time, disclosure-only regimes are often inadequate and not holistic enough. It has been reported, for instance, that these regimes – particularly within the financial sector – are insufficient in driving changes of corporate behaviour due to their limited enforcement mechanisms, and lack of direct-action requirements and appropriate data by ratings and other data providers.³⁶ In the light of these concerns, stronger human rights due diligence that covers a broad spectrum of human rights impacts going beyond slavery-related concerns is essential to ensure genuine accountability and foster necessary improvements in corporate practices and supply chain management.

36. Joint submission by Walk Free, Churches, Charities and Local Authorities, and Investors Against Slavery and Trafficking – Asia-Pacific, and submissions by HACE, and Justice and Care. ↩

In addition to disclosure, many States in Asia, Africa and Latin America are developing and adopting national action plans on business and human rights or other policies to promote responsible business and corporate accountability, including human rights due diligence. While these are not legally binding measures, they represent a good starting point towards the adoption of mandatory human rights due diligence regimes at a later stage, particularly in countries where stakeholders still lack the understanding, resources or capacity to implement such regimes effectively.

In other States, stronger mandatory human rights due diligence schemes are incorporated. This is particularly prominent in Europe, in States such as France (Duty of Vigilance Law 2017), Germany (Supply Chain Due Diligence Act 2021) and Norway (Transparency Act 2022), but is also being proposed in other jurisdictions, including the Republic of Korea and Thailand. Mandatory human rights due diligence requires financial sector actors to identify, assess, prevent, mitigate and account for human rights impacts, including slavery risks in their operations and value chains, with the imposition of penalties for non-compliance.

At the regional level, the European Union adopted the directive on corporate sustainability due diligence (Directive 2024/1760), which will impose mandatory due diligence obligations on all 27 member States. While this is an important development, the directive has limitations.³⁷ It excludes downstream services including core financial services (i.e. lending, investing and insurance) from due diligence obligations. Furthermore, the omnibus proposal to reform the directive currently being considered by the European Union suggests the deletion of the review clause regarding financial services and the investment activities of regulated financial undertakings, under article 36 (1) of the directive.³⁸ It also proposes to amend the directive “in a way that relieves companies from the obligation to proactively assess actual or potential adverse impacts at the level of indirect business partners (i.e. those beyond the first tier) in the absence of specific circumstances”,³⁹ thereby undermining the human rights-based risk management approach of the Guiding Principles and the original directive.

37. See A/HRC/53/24/Add.2, paras. 13–20. ↩
38. See https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52025PC0081. ↩
39. See https://commission.europa.eu/document/download/1da93ca2-7911-4e1f-9ce6-cecd09a85250_en?filename=SWD-Omnibus-80-81_En.pdf, p. 35. ↩

The Special Rapporteur notes that many legislative or policy frameworks listed above are failing explicitly to include downstream value chain activities, such as lending or investing, which are central for financial sector actors’ activities. For example, in the United Kingdom, the Modern Slavery Act of 2015 does not explicitly require businesses to consider their downstream modern slavery risks, although the United Kingdom recently established a guideline that financial institutions “may” need to consider, particularly in respect of their investee companies.⁴⁰ Similarly, in Germany, the Federal Office for Economic Affairs and Export Control has stated that the downstream activities of financial institutions are excluded from mandatory due diligence obligations.⁴¹

40. See www.gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide/transparency-in-supply-chains-a-practical-guide-accessible. ↩
41. Federal Office for Economic Affairs and Export Control, “Guidance on the application on the Act on Corporate Due Diligence Obligations in Supply Chains in the banking and insurance industry” (Eschborn, Germany, 2023). ↩

Regardless of the types of human rights due diligence regimes adopted or currently in development, there is a need for clear guidance on how human rights due diligence obligations apply to downstream activities.⁴² In Australia, one promising example in this regard is the Guidance for Reporting Entities, which specifically includes financial sector actors and provides detailed instructions on how they should assess and report on their slavery-related risks.⁴³

42. Joint submission by Walk Free, Churches, Charities and Local Authorities, and Investors Against Slavery and Trafficking – Asia-Pacific. ↩
43. See https://antislavery.org.au/wp-content/uploads/2020/02/modern-slavery-reporting-entities.pdf. ↩

The Special Rapporteur emphasizes that a blanket exclusion from human rights due diligence obligations of lending and investing activities does not align with the Guiding Principles. In reality, an increasing number of financial sector actors are in support of mandatory human rights due diligence for the sector. In 2020, over 100 investors from different jurisdictions called upon Governments to develop, implement 37 See A/HRC/53/24/Add.2, paras. 13–20. 38 See https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52025PC0081. 39 See https://commission.europa.eu/document/download/1da93ca2-7911-4e1f-9ce6cecd09a85250_en?filename=SWD-Omnibus-80-81_En.pdf, p. 35. 40 See www.gov.uk/government/publications/transparency-in-supply-chains-a-practicalguide/transparency-in-supply-chains-a-practical-guide-accessible. 41 Federal Office for Economic Affairs and Export Control, “Guidance on the application on the Act on Corporate Due Diligence Obligations in Supply Chains in the banking and insurance industry” (Eschborn, Germany, 2023). 42 Joint submission by Walk Free, Churches, Charities and Local Authorities, and Investors Against Slavery and Trafficking – Asia-Pacific. 43 See https://antislavery.org.au/wp-content/uploads/2020/02/modern-slavery-reportingentities.pdf. and enforce mandatory human rights due diligence requirements.⁴⁴ 44 The Special Rapporteur also endorses the investor-led statement that “if the financial sector will accept the profits from these activities, it must accept the responsibility to respect human rights in its business conduct”.⁴⁵

44. See www.business-humanrights.org/en/latest-news/the-investor-case-for-mandatory-human-rights-due-diligence/. ↩
45. Joint submission by Walk Free, Churches, Charities and Local Authorities, and Investors Against Slavery and Trafficking – Asia-Pacific. ↩

Other regulations can also incentivize financial sector actors to take action against contemporary forms of slavery. An import ban on goods produced as a result of forced and child labour, adopted in Canada, Mexico and the United States of America, as well as the European Union,⁴⁶ is a good example. It does not impose disclosure or human rights due diligence obligations, but in reality, an import ban encourages businesses to identify and mitigate the risks. Interestingly, financial sector actors have also stated that import bans directly influence investors’ decisions.⁴⁷. Furthermore, human rights considerations, including contemporary forms of slavery, in public procurement requirements can nudge financial sector actors towards responsible lending and investments,⁴⁸ and the inclusion of the slavery-related criteria in legislation or policy frameworks, such as social and environmental taxonomies, as well as those on investor stewardship, can help drive capital towards addressing contemporary forms of slavery.⁴⁹

46. See section 307 of the United States Tariff Act of 1930; the Forced Labour and Child Labour in Supply Chains Act (2023) of Canada and its amendment of the Customs Tariff, Sect. 132(1); the official journal of Mexico for 17 February 2023, available from https://diariooficial.gob.mx/index_100.php?year=2023&month=02&day=17#gsc.tab=0; and the European Union forced labour regulation (EU) 2024/3015. ↩
47. Submission by RIAA. ↩
48. Submissions by the Sovereign Order of Malta. ↩
49. Submission by Principles for Responsible Investment. ↩

Action against money-laundering is also important for financial sector actors. Multiple countries have adopted anti-money-laundering legislation⁵⁰ designating contemporary forms of slavery as predicate offences, meaning that the profits generated from these practices are regarded as illegal proceeds subject to confiscation. Of particular importance in national legal frameworks is the requirement imposed on financial sector actors to report suspicious financial activities linked to money-laundering. This allows enforcement authorities to identify and confiscate criminal proceeds in a timely manner. The threshold amounts for reporting vary among States.

50. Submissions by Azerbaijan, Mexico, Norway, Pakistan, Switzerland, COMCRIM and Rights Lab. ↩

Despite ongoing efforts, the effective application of anti-money-laundering measures remains challenging. Key obstacles include a lack of specific knowledge among financial sector actors, unclear reporting guidelines from regulatory bodies, large volumes of suspicious activities that need to be reported, as well as limited access to timely and comprehensive information and data.⁵¹ The lack of feedback on suspicious activity reports also hinders the refinement of detection systems and accountability efforts. In addition, for cross-border trafficking in persons, perpetrators sometimes use or operate as legitimate labour agencies, such as authorized migrant worker recruitment agencies, and financial flows from their operations can be registered as legal income of legitimate businesses.⁵² Cryptocurrencies and their platforms are also increasingly used to generate illegal profits from contemporary forms of slavery, but regulation in this area remains weak.⁵³

51. Submission by Honduras and Praeveni Global. ↩
52. See CTOC/COP/WG.4/2015/2, para. 13; and Middle East and North Africa Financial Action Task Force, “Money Laundering Resulting from the Human Trafficking and Migrant Smuggling Crimes” (Manama, Bahrain, 2021), p. 80. ↩
53. Submission by International Justice Mission. ↩

To address these systemic gaps, some encouraging initiatives are emerging. In the Kingdom of the Netherlands, COMCRIM, a public-private consortium, explores proactive financial investigations using innovative data sources to detect potential victims of human trafficking.⁵⁴ In Canada, Project Shadow, a partnership involving a bank, a civil society organization and a government body, enables enhanced monitoring and reporting of financial indicators related to online child sexual exploitation and its money-laundering. A similar system is Project Qawaq in Peru.⁵⁵

54. Submission by COMCRIM. ↩
55. Submission by ECPAT International. ↩

Regionally, Humanity Research Consultancy and LexCollective have developed typologies to explain the illicit financial flows linked to forced criminality and money-laundering in the South-East Asia cyberscam compounds.⁵⁶ In Europe, the Organization for Security and Co-operation in Europe partnered with the Finance against Slavery and Trafficking initiative to co-develop a practitioner’s guide on preventing illicit financial flows associated with trafficking in human beings, a voluntary tool offering practical guidance to financial institutions and regulators. In addition, the Middle East and North Africa Financial Action Task Force conducted a study about human trafficking and money-laundering, containing red-flag indicators to identify illicit financial flows, including the use of legitimate businesses, such as recruiting agencies.⁵⁷ Such a multi-stakeholder approach, especially with the inclusion of civil society, is important.⁵⁸

56. Joint submission by Freedom Collaborative, Humanity Research Consultancy, LexCollective and Operation Shamrock. ↩
57. See Middle East and North Africa Financial Action Task Force, “Money Laundering”, p. 80. ↩
58. Submissions by Pacific Links Foundation. ↩

Internationally, the Financial Action Task Force has been setting the standards on anti-money-laundering measures. Trafficking in persons and sexual exploitation are identified as “designated categories of offences” and linked to money-laundering, which triggers enhanced monitoring, reporting and preventive measures by financial sector actors and national authorities. In addition, the Egmont Group, a global network of financial intelligence units, facilitates international cooperation and information-sharing to identify and disrupt illicit financial flows linked to human trafficking.

While welcoming such development of anti-money-laundering measures, the Special Rapporteur observes that current practices concentrate only on part of contemporary forms of slavery, especially human trafficking and child sexual exploitation.⁵⁹ It should be emphasized in this regard that money-laundering is also linked to labour and other forms of exploitation, including in situations where such practices are orchestrated or tolerated by the State.⁶⁰ Therefore, broadening the scope of anti-money-laundering measures to cover wider contemporary forms of slavery is important. 52 See CTOC/COP/WG.4/2015/2, para. 13; and Middle East and North Africa Financial Action Task Force, “Money Laundering Resulting from the Human Trafficking and Migrant Smuggling Crimes” (Manama, Bahrain, 2021), p. 80. 53 Submission by International Justice Mission. 54 Submission by COMCRIM. 55 Submission by ECPAT International. 56 Joint submission by Freedom Collaborative, Humanity Research Consultancy, LexCollective and Operation Shamrock. 57 See Middle East and North Africa Financial Action Task Force, “Money Laundering”, p. 80. 58 Submissions by Pacific Links Foundation. 59 Submission by Declaration of Casablanca. 60 See S/2024/215, paras. 151–153, 168 and 169; and submission by PSCORE.

59. Submission by Declaration of Casablanca. ↩
60. See S/2024/215, paras. 151–153, 168 and 169; and submission by PSCORE. ↩

Furthermore, anti-money-laundering measures that intend to combat crime may inadvertently increase the vulnerability of trafficking victims/survivors.⁶¹ They are often subjected to financial exploitation by traffickers or other perpetrators as bank accounts are opened in their names to launder illegal proceeds. Survivors may end up receiving criminal records for involvement in immigration offences or forced criminality or lack a permanent address in the jurisdiction in which they are seeking support. These and other circumstances can encourage financial sector actors to file suspicious activity reports, resulting in financial exclusion,⁶² and States must ensure that victims and survivors are protected from these instances.

61. Submission by Mexico. ↩
62. See https://unu.edu/cpr/brief/lessons-survivor-inclusion-initiative. ↩

Guidance has been developed globally for the business and human rights initiatives of financial sector actors. At the international level, the Organisation for Economic Cooperation and Development (OECD) has published several guidelines on human rights due diligence for institutional investors, lending and securities underwriting and project and asset finance transactions. The Finance against Slavery and Trafficking initiative similarly delivers tailored tools for the financial sector to prevent and respond to contemporary forms of slavery. In addition, the Working Group on business and human rights has issued several reports on the role of the financial sector,⁶³ and the Human Rights Toolkit for Financial Institutions of the United Nations Environment Programme Finance Initiative provides tools for banks to improve their human rights due diligence.⁶⁴

63. See A/HRC/56/55 and A/HRC/47/39/Add.1. See also www.pactoglobal-colombia.org/biblioteca/publicaciones/derechos-humanos/%C2%BFcomo-integrar-los-derechos-humanos-en-las-finanzas-en-america-latina-y-el-caribe.html. ↩
64. Submission by the United Nations Environment Programme Finance Initiative. ↩

With regard to international and regional development financial institutions, the environmental and social safeguards frameworks have been developed to address physical, environmental and social risks in infrastructure projects.⁶⁵ These frameworks include provisions addressing forced and child labour. For instance, the World Bank’s Environmental and Social Framework, established in 2016, requires borrowers to identify and address risks of child labour, forced labour and serious safety issues among their primary suppliers.⁶⁶ Similarly, the International Finance Corporation Performance Standard 2: Labour and Working Conditions (2012) mandates clients to identify and remedy risks of child and forced labour in their primary supply chains.⁶⁷

65. See www.worldbank.org/en/projects-operations/environmental-and-social-framework; www.adb.org/documents/environmental-social-framework; www.iadb.org/en/who-we-are/topics/environmental-and-social-solutions/environmental-and-social-policy-framework; EBRD, “Environmental and Social Policy” (London, 2024); AfDB, “Integrated Safeguards System” (Abidjan, 2023); and International Finance Corporation, Performance Standard 2, Labour and Working Conditions (2012). ↩
66. See World Bank, Environmental and Social Framework, Environmental and Social Standard 2: Labour and Working Conditions, pp. 31–36, available from https://thedocs.worldbank.org/en/doc/837721522762050108-0290022018/original/ESFFramework.pdf. ↩
67. International Finance Corporation, Performance Standard 2, paras. 21–22. ↩

However, these environmental and social safeguards frameworks fall short of full alignment with the Guiding Principles, which call for human rights due diligence 61 Submission by Mexico. 62 See https://unu.edu/cpr/brief/lessons-survivor-inclusion-initiative. 63 See A/HRC/56/55 and A/HRC/47/39/Add.1. See also www.pactoglobalcolombia.org/biblioteca/publicaciones/derechos-humanos/%C2%BFcomo-integrar-los-derechoshumanos-en-las-finanzas-en-america-latina-y-el-caribe.html. 64 Submission by the United Nations Environment Programme Finance Initiative. 65 See www.worldbank.org/en/projects-operations/environmental-and-social-framework; www.adb.org/documents/environmental-social-framework; www.iadb.org/en/who-weare/topics/environmental-and-social-solutions/environmental-and-social-policy-framework; EBRD, “Environmental and Social Policy” (London, 2024); AfDB, “Integrated Safeguards System” (Abidjan, 2023); and International Finance Corporation, Performance Standard 2, Labour and Working Conditions (2012). 66 See World Bank, Environmental and Social Framework, Environmental and Social Standard 2: Labour and Working Conditions, pp. 31–36, available from https://thedocs.worldbank.org/en/ doc/837721522762050108-0290022018/original/ESFFramework.pdf. 67 International Finance Corporation, Performance Standard 2, paras. 21–22. 12/21 across the entire value chain. In this regard, most of the safeguard frameworks are limited in scope to direct (tier 1) suppliers, and are further narrowed by using the term “primary suppliers”. They also limit their scope to materials alone.⁶⁸ By contrast, some frameworks have taken steps toward broader alignment with the Guiding Principles. For example, the 2024 environmental and social policy of the European Bank for Reconstruction and Development (EBRD) has expanded due diligence obligations to include suppliers beyond the first tier,⁶⁹ and the African Development Bank (AfDB) framework refers to both materials and services.⁷⁰

68. Office of the United Nations High Commissioner for Human Rights (OHCHR) “Strengthening Supply and Value Chain Risk Management: The Role of Development Finance Institutions’ Environmental & Social Safeguard Policies Policy Brief” (June 2025), pp. 14–16. ↩
69. EBRD, “Environmental and Social Policy”, sect. II. ↩
70. See AfDB, “Integrated Safeguards System”, glossary. ↩

In line with principle 16 of the Guiding Principles, certain financial sector actors have started to establish their own institutional-level human rights policy commitments. The participation of financial sector actors in initiatives on transparent environment, social and governance disclosure – including Principles for Responsible Investment, Principles for Responsible Banking and Principles for Sustainable Insurance – represents a step in the right direction. Some public financial actors have taken steps to integrate measures addressing risks of contemporary forms of slavery, such as mandatory compliance related to protection from sexual exploitation and abuse.⁷¹

71. Submission by Colombia. ↩

These commitments must go beyond paper and be put into practice. However, establishing robust governance structures and processes to operationalize human rights policy commitments remains one of the key challenges for financial sector actors. With regard to contemporary forms of slavery, embedding anti-slavery clauses directly into internal policies or any legal instruments, including contracts, is a promising way forward. Measures for embedding these operational-level policies, such as training, performance and accountability structures, as well as firm commitments from senior management and the board, are essential to ensure that these clauses are effectively applied to all parts of the operations and value chains of financial sector actors.

There are some emerging practices in this regard. Several insurance companies collaborated with the civil society organization (CSO) Anti-Slavery International and developed a clause that requires marine cargo policies to ensure that insured parties comply with legal and regulatory obligations to prevent forced and child labour. The Fidelis Group has also included the clause when providing insurance coverage for certain high-risk industries in countries where those industries are known to present a vulnerability to forced labour. Industries such as garment manufacturing, mining and commodities such as cocoa and sugar are examples in this regard.⁷²

72. See https://fidelis-partnership.s3.eu-west-2.amazonaws.com/fidelis-website/documents/fidelis-mgu-anti-slavery-statement.pdf. ↩

Conducting human rights due diligence can help financial sector actors to avoid or reduce legal, reputational, financial and operational risks, and to fulfil their responsibility to respect human rights within their own operations, including the prevention of contemporary forms of slavery.⁷³ In this regard, LBP AM, a French asset 68 Office of the United Nations High Commissioner for Human Rights (OHCHR) “Strengthening Supply and Value Chain Risk Management: The Role of Development Finance Institutions’ Environmental & Social Safeguard Policies Policy Brief” (June 2025), pp. 14–16. 69 EBRD, “Environmental and Social Policy”, sect. II. 70 See AfDB, “Integrated Safeguards System”, glossary. 71 Submission by Colombia. 72 See https://fidelis-partnership.s3.eu-west-2.amazonaws.com/fidelis-website/documents/fidelismgu-anti-slavery-statement.pdf. 73 Submission by Z. Mungroo, R. Tupsee, J. Pierre and Y. Obhymaun. manager, conducts risk mapping to identify salient human rights impacts across various sectors, drawing from civil society reports and benchmarks.⁷⁴ 74

73. Submission by Z. Mungroo, R. Tupsee, J. Pierre and Y. Obhymaun. ↩
74. See A/HRC/56/55, para. 56. ↩

Human rights due diligence processes that are aligned with the Guiding Principles require financial actors to prioritize their actions on the basis of the severity and likelihood of an actual or potential human rights impact. However, the Special Rapporteur observes that there are still common misunderstandings, whereby other factors – such as financial materiality to companies – are taken into account when determining priorities. These practices are not in line with the Guiding Principles because they focus on financial risks to business, rather than human rights impacts on people, and should be avoided.

To prevent contemporary forms of slavery, an increasing number of financial sector actors have developed internal portfolio risk mapping tools that rely on public indicators such as the Global Slavery Index. Similarly, the International Trade Union Confederation’s Global Rights Index comprises a comprehensive review of workers’ rights in law, ranking 151 countries against a list of 97 indicators derived from ILO conventions and jurisprudence at the country level. Other organizations, such as Know the Chain and the Global Estimates of Modern Slavery, regularly issue data on human rights abuses found in value chains and on contemporary forms of slavery more broadly. Other CSO resources, including the Business and Human Rights Resource Centre, provide helpful guidance to investors about human rights risks or impacts in a specific sector, jurisdiction and/or company.

At the national level, the Stock Exchange of Thailand “Smart Marketplace”, an online data platform, provides market participants with real-time and historical market data, financial data and environment, social and governance risk management data, as well as voluntary disclosures on forced labour, where available.⁷⁵ In Brazil, another initiative is the “dirty list”, which names employers who have subjected workers to conditions amounting to contemporary forms of slavery. While on the list, employers are not authorized to obtain credit from State-owned financial institutions. Private financial sector actors also use the list for consultation and may apply restrictions on credit concessions for companies or individuals.⁷⁶

75. See www.set.or.th/en/services/connectivity-and-data/data/smart-marketplace. ↩
76. Submissions by Brazil and Oxfam Brazil. ↩

Digital technologies can be a powerful enabler of deeper value chain human rights due diligence. For example, the “Artificial Intelligence against Modern Slavery” project of the organization Walk Free analyses modern slavery statements with the use of artificial intelligence and assesses compliance with the Modern Slavery Acts of Australia and the United Kingdom to strengthen business actions and policy responses.⁷⁷ The Mitsubishi UFJ Financial Group bank in Japan and the Singaporean palm oil company Musim Mas have collaborated with small farmers in Indonesia to digitalize the paper certificates issued by the organization Roundtable on Sustainable Palm Oil, using a “web3 wallet”. This has increased supply-chain traceability functions and contributes to the prevention of human rights abuses, especially child labour, in their value chains.⁷⁸

77. See https://cdn.walkfree.org/content/uploads/2021/05/05173207/20210428-digital-insights-into-modern-slavery.pdf. ↩
78. See www.mufg.jp/dam/csr/report/humanrights/2024_en.pdf, p. 29. ↩

While digital tools significantly enhance human rights due diligence efforts to prevent contemporary forms of slavery, in order to genuinely improve respect for human rights across their activities, financial sector actors must centre their decisionmaking around the meaningful participation and consultation of rights holders and civil society organizations, especially individuals and groups at heightened risk of 74 See A/HRC/56/55, para. 56. 75 See www.set.or.th/en/services/connectivity-and-data/data/smart-marketplace. 76 Submissions by Brazil and Oxfam Brazil. 77 See https://cdn.walkfree.org/content/uploads/2021/05/05173207/20210428-digital-insights-intomodern-slavery.pdf. 78 See www.mufg.jp/dam/csr/report/humanrights/2024_en.pdf, p. 29. 14/21 abuses. This collaboration allows them to identify “red flags” in company operations that digital tools might miss and implement effective mechanisms. For instance, it is crucial for financial sector actors to understand and ensure that the data used for artificial intelligence training should come from diverse sources and reflect a wide range of backgrounds. Without this, artificial intelligence tools can introduce bias and error, potentially overlooking or further marginalizing groups and individuals in a vulnerable situation.⁷⁹

79. See https://unu.edu/sites/default/files/2023-10/AI%20addressing%20or%20distorting%20modern%20slavery%20challenge.pdf, p. 5; and A/HRC/59/55. ↩

In recent years, many financial sector actors have become signatories to the Equator Principles, a risk management framework adopted by the sector to determine, assess and manage environmental and social risk in project finances and conduct human rights due diligence. They align with the above-mentioned Performance Standard 2 of the International Finance Corporation, and require financial sector actors to identify and address environmental and social risks within project-related workforces, including contractors and subcontractors.⁸⁰ Nevertheless, this framework has limitations. Its scope refers to project finance with capital costs of $10 million or more, and Performance Standard 2 falls well short of the level of human rights due diligence required by the Guiding Principles due to their limited application to the part of upstream value chains.⁸¹ Furthermore, the Working Group on business and human rights and the Special Rapporteur on the right to development have called for a central effective grievance mechanism for the Equator Principles governing body.⁸²

80. See https://equator-principles.com/app/uploads/The-Equator-Principles_EP4_July2020.pdf; and International Finance Corporation, Performance Standard 2, paras. 21–22. ↩
81. See OHCHR, “Strengthening Supply and Value Chain Risk Management”, pp. 14–16. ↩
82. See communication OTH 104/2024, available at https://spcommreports.ohchr.org/TMResultsBase/DownLoadPublicCommunicationFile?gId=29135. ↩

It is encouraging that some financial sector actors are using their leverage individually or by collaborative actions and are articulating their own expectations regarding the impact of corporate action on contemporary forms of slavery. In this regard, Investors Against Slavery and Trafficking – Asia-Pacific, a multi-stakeholder initiative that brings together investors, civil society organizations and industry groups, engages collaboratively with companies in the Asia-Pacific region on risk assessments, grievance mechanisms, audits, disclosure and policy development.

Other examples should also be mentioned. Through the Advance initiative of the Principles for Responsible Investment, investors have pledged to advance human rights through investor stewardship. At Rathbones, the “Votes Against Slavery” coalition of investors has collectively used the threat of investors’ voting rights to push for better policy commitments and disclosures by investee companies, particularly required by the United Kingdom Modern Slavery Act 2015. In addition, in the United Kingdom, the “Find it, Fix it, Prevent It” initiative of the organization Churches, Charities and Local Authorities focuses on investor engagement in the hospitality and construction sectors, both of which face high risks of forced labour.

Furthermore, in Uzbekistan, systemic forced and child labour in the cotton sector was addressed through a concerted international effort. A clear shift in the State’s policy was catalysed by sustained pressure from a broad coalition, including multilateral development banks, various Governments, the United Nations, civil society organizations and businesses. This coordinated effort, rigorously monitored by the International Labour Organization from 2015 to 2021 under an agreement with the World Bank, ultimately led to the near elimination of systemic child and forced labour from Uzbek cotton production.⁸³

83. See www.ilo.org/resource/news/uzbek-cotton-free-systemic-child-labour-and-forced-labour. ↩

Forced labour and other practices amounting to contemporary forms of slavery are serious human rights violations. Nevertheless, disengagement from a business relationship is only appropriate as a last resort after failed attempts at preventing or mitigating severe human rights impacts. These cases include situations when adverse impacts are irremediable and where there is no reasonable prospect of change.⁸⁴ As an example, the Norwegian Government Pension Fund Global decided to divest from a company found to have resorted to forced labour in the Democratic People’s Republic of Korea.⁸⁵

84. See Guiding Principles, principle 19; and www.oecd.org/content/dam/oecd/en/publications/reports/2018/02/oecd-due-diligence-guidance-for-responsible-business-conduct_c669bd57/15f5f4b3-en.pdf, annex, Q39. ↩
85. See www.fastinitiative.org/resources/insight_2/. ↩

With regard to the responsibility to communicate externally in line with principle 21 of the Guiding Principles, few financial sector actors disclose their processes on assessing the human rights risks of their financing activities. According to the research of the World Benchmarking Alliance, while 25 per cent of financial institutions commit to protecting workers’ rights, only 6 per cent specify through which concrete measures they intend to do so.⁸⁶ One positive example is the Mizuho Financial Group of Japan, which recently disclosed instances of forced or child labour identified in the value chains of its clients and issued a list of detail steps to be taken for corrective actions in its Human Rights Report 2024.

86. See www.worldbenchmarkingalliance.org/financial-system-benchmark/. ↩

As to remediation under principle 22 of the Guiding Principles, several encouraging examples can be found. The Australia and New Zealand Banking Group Limited received a complaint regarding its financing of a company accused of forced displacement, child labour and other exploitative practices in Cambodia. The flaws in the Bank’s human rights-related policies and due diligence mechanisms were also indicated. Due to the pressure from the Bank’s shareholders and civil society organizations, it eventually provided financial support to the affected communities.⁸⁷ As to other examples, in the Kingdom of the Netherlands, De Nederlandsche Bank acknowledged its links to historical enslavement, which in turn triggered a process of reflection and dialogue, including measures to address its past.⁸⁸ There is also a case where a group of banks and investors used its leverage with an investee garment company headquartered in the United States, urging it to provide compensation to factory workers in Cambodia and Thailand whose wages had been withheld.⁸⁹

87. Joint submission by Walk Free, Churches, Charities and Local Authorities, and Investors Against Slavery and Trafficking – Asia-Pacific. ↩
88. See A/HRC/51/53, para. 59. ↩
89. See https://collaborate.unpri.org/system/files/2023-09/Joint%20investor%20letter%20to%20Nike%20re%20Ramatex%20Violet%20Apparel%20Hong%20Seng%20Final.pdf. ↩

The Special Rapporteur on contemporary forms of slavery is also encouraged to note that an increasing number of financial sector actors are establishing or participating in operational-level grievance mechanisms. For example, the bank ABN AMRO, after consultations with CSOs, trade unions, academics and other stakeholders, established a human rights grievance mechanism in⁹⁰ 2019. 90 In establishing such mechanisms, financial sector actors should pay close attention to the effective criteria spelled out in principle 31 of the Guiding Principles, which touch upon issues such as legitimacy, accessibility, predictability, equity and transparency. 84 See Guiding Principles, principle 19; and www.oecd.org/content/dam/oecd/en/ publications/reports/2018/02/oecd-due-diligence-guidance-for-responsible-businessconduct_c669bd57/15f5f4b3-en.pdf, annex, Q39. 85 See www.fastinitiative.org/resources/insight_2/. 86 See www.worldbenchmarkingalliance.org/financial-system-benchmark/. 87 Joint submission by Walk Free, Churches, Charities and Local Authorities, and Investors Against Slavery and Trafficking – Asia-Pacific. 88 See A/HRC/51/53, para. 59. 89 See https://collaborate.unpri.org/system/files/2023-09/Joint%20investor%20letter% 20to%20Nike%20re%20Ramatex%20Violet%20Apparel%20Hong%20Seng%20Final.pdf. 90 See www.abnamro.com/en/contact/information/abn-amros-human-rights-remedy-mechanism. 16/21

90. See www.abnamro.com/en/contact/information/abn-amros-human-rights-remedy-mechanism. ↩

Throughout the process of human rights due diligences and establishing remedial mechanisms, meaningful engagement and consultation with potentially affected groups and their representatives is important. As an example, IFM Investors, the International Trade Union Confederation and the Australian Council of Trade Unions and its affiliates, including the Maritime Union of Australia, signed a memorandum of understanding in 2019, developed labour rights charters and established a multi-stakeholder project to proactively identify and address slavery risks in seafaring operations at ports owned by IFM Investors. This initiative integrates strong principles-based engagement and grievance mechanisms to protect seafarers from labour exploitation.⁹¹

91. Submission by Maritime Union of Australia. ↩

Similarly, the Platform Living Wage Financials, a coalition of financial institutions aiming to encourage and monitor investee companies’ progress towards paying living wages in global supply chains, engages with potentially affected workers and civil society actors through structured consultations, including its “Friends of the Platform” network of non-governmental organizations and trade unions. These stakeholders provide critical input into investor assessment and engagement strategies, helping to ensure that expectations on living wages and grievance mechanisms are informed by on-the-ground realities.⁹²

92. See https://livingwage.nl/wp-content/uploads/2025/01/PLWF-Annual-Report-2024_def.pdf, p. 7. ↩

As part of broader strategies to prevent and address contemporary forms of slavery, innovative financial and investment models have emerged to address systemic risks and empower vulnerable workers. The Working Capital fund, supported by the Humanity United foundation, is a venture capital fund focused on advancing economic equity through supply chain transformation. The fund’s investees address the human rights abuses faced by marginalized workers, including forced labour, child labour, gender inequality, substandard wages and systemic safety risks. In total, 50 per cent of the investment capital is allocated to companies founded or led by women.⁹³ In Hong Kong, China, the Fair Employment Foundation provides ethical recruitment and employment solutions for migrant workers and employers. One of its ventures provides flexible funding that enables entrepreneurs in Asia and the Pacific to establish recruitment businesses that align with the Fair Employment Foundation’s ethical recruitment approach.

93. See https://workingcapitalfund.com/working-capital-fund-annual-impact-report-2024/. ↩

In addition, social impact bonds or specific loans linked to anti-slavery outcomes may contribute to measurable impacts and accountability.⁹⁴ Remedy Finance – a collective remediation initiative by Rabobank, LTMA (Less Talk, More Action) Capital and Impactt – provides a low-interest debt facility to small companies for lump-sum repayment of worker recruitment fees. A portion of the interest is waived if borrowers demonstrate ethical recruitment practices. In its pilot phase, it aims to address 1–2 per cent of all worker-paid recruitment fees in the Malaysian palm oil sector.⁹⁵

94. Submission by Plurinational State of Bolivia. ↩
95. See www.linkedin.com/pulse/remedy-finance-market-solution-forced-labor-ltma-capital-opslc?trk=public_post. ↩

Another example is KOIS, a Belgium-based impact finance firm that created the world’s first Refugee Impact Bond to support the economic self-reliance of Syrian refugees and host communities in Jordan and Lebanon. It mobilized private 91 Submission by Maritime Union of Australia. 92 See https://livingwage.nl/wp-content/uploads/2025/01/PLWF-Annual-Report-2024_def.pdf, p. 7. 93 See https://workingcapitalfund.com/working-capital-fund-annual-impact-report-2024/. 94 Submission by Plurinational State of Bolivia. 95 See www.linkedin.com/pulse/remedy-finance-market-solution-forced-labor-ltma-capitalopslc?trk=public_post. investment with repayments linked to verified improvements in participants’ livelihoods.⁹⁶ The integration of anti-slavery considerations into sustainable bond frameworks is becoming increasingly relevant as demands for responsible and sustainable investments increase. At the same time, transparency, accountability and rights holder-centred design remain critical to ensure these tools do not inadvertently replicate exclusion. In this regard, the Finance against Slavery and Trafficking initiative is working with Governments, civil society and financial actors to include the prevention of contemporary forms of slavery in debt strategies.⁹⁷

96. See www.refugeeimpactbond.org. ↩
97. Submission by UNDP. ↩

Financial sector actors are well placed to actively support initiatives aimed at economic empowerment and financial inclusion for survivors of contemporary forms of slavery alongside their compliance and regulatory obligations.⁹⁸ Notably, several banks and financial institutions across countries including Canada,⁹⁹ Mexico, the United Kingdom and the United States have started financial inclusion strategies for survivors, often in partnership with civil society organizations. Such efforts include developing survivor-centred banking services and risk-sensitive due diligence procedures, with the aim of avoiding inadvertently excluding trafficking survivors from access to financial services. As an example, the Financial Consumer Agency of Canada published a guidance in 2023 that outlines the expectations placed on financial sector actors to facilitate financial access for people without standard identity documentation, including survivors of human trafficking.¹⁰⁰

98. Submission by the National Indigenous Women Forum, the Freed Kamlari Development Forum and Jocelyn Getgen Kestenbau. ↩
99. Submission by Gilberto Lucio Cedolia. ↩
100. See www.canada.ca/en/financial-consumer-agency/services/industry/bulletins/access-basic-banking.html. ↩

Linking survivors of contemporary forms of slavery with credit reference agencies is another promising area. As an example, the civil society organization Hope for Justice maintains a referral pathway with a global credit data provider to support survivors who have debts or whose identities were used to obtain financial products fraudulently. This pathway enables the identification of suspicious credits linked to survivors, the clearance of unauthorized debts and the correction of survivors’ credit files or records, making it easier for them to gain access to financial services in the future.¹⁰¹

101. Submission by Slave-Free Alliance. ↩

Lastly, addressing the root causes of contemporary forms of slavery, such as poverty, inequality and discrimination, especially for groups in vulnerable situations, is essential. In this regard, States, financial sector actors, civil society and other stakeholders are increasingly working together to improve access to bank accounts and other financial services for individuals at high risk of contemporary forms of slavery, such as migrant workers, those in the informal sector and persons experiencing homelessness.¹⁰²

102. See A/77/163, para. 57; and A/HRC/54/30, para. 60. ↩

Microfinances, such as microcredit and microinsurance initiatives and digital banking, are also important tools.¹⁰³ As an example, the R4 Rural Resilience Initiative, developed by the World Food Programme and Oxfam, provides agricultural index insurance that enables rural families to strengthen their food and income security by managing climate-related risks across Africa, Asia and the Latin America and Caribbean regions. It focuses on improved resource management through nature-based solutions or improved agricultural practices, access to insurance, microcredits and savings, 96 See www.refugeeimpactbond.org. 97 Submission by UNDP. 98 Submission by the National Indigenous Women Forum, the Freed Kamlari Development Forum and Jocelyn Getgen Kestenbau. 99 Submission by Gilberto Lucio Cedolia. 100 See www.canada.ca/en/financial-consumer-agency/services/industry/bulletins/access-basicbanking.html. 101 Submission by Slave-Free Alliance. 102 See A/77/163, para. 57; and A/HRC/54/30, para. 60. 103 Submission by Fundación para la democracia internacional. 18/21 increased investment and livelihoods diversification.¹⁰⁴ The Special Rapporteur wishes to encourage financial sector actors, in closer cooperation with other stakeholders, to do more in order to protect workers from contemporary forms of slavery.

103. Submission by Fundación para la democracia internacional. ↩
104. See www.wfp.org/r4-rural-resilience-initiative; and submission by Queen’s University. ↩

A growing number of good practices are emerging within the financial sector to prevent and address contemporary forms of slavery, including the development of regulatory or policy frameworks. These initiatives illustrate the increasing recognition among financial sector actors of their leverage and responsibility to respect human rights, influence business conduct, strengthen value chain human rights due diligence and contribute to effective remediation mechanisms. The Special Rapporteur is also encouraged by innovative financial and investment models that aim to address contemporary forms of slavery or their root causes.

At the same time, it is imperative that actors in the financial sector take more decisive and proactive measures. Their action should focus on their own operations and their value chains where their activities cause, contribute to or are directly linked to forced labour, child labour and related practices. Regulatory frameworks remain insufficiently aligned with international human rights and labour standards. Many financial sector actors continue to fall short in fully implementing human rights due diligence in line with the Guiding Principles on Business and Human Rights. The meaningful participation of affected rights holders – such as victims and survivors, civil society organizations and workers’ organizations – remains indispensable for the promotion of more robust, effective and accountable financial sector practices. In the absence of such engagement, financial sector interventions risk becoming procedural and failing to achieve transformative change.

The Special Rapporteur recommends that States:
(a) Adopt and effectively implement mandatory human rights due diligence legislation applicable to both upstream and downstream activities, including the core financial services of lending, investment and insurance, fully aligned with the Guiding Principles and other international standards on responsible business conduct;
(b) Develop and adopt legal and regulatory disclosure frameworks, including binding disclosure standards;
(c) Ensure disclosure frameworks and human rights due diligence obligations include oversight mechanisms and proportionate and dissuasive sanctions for non-compliance;
(d) Develop clear and practicable sector-specific guidance on the applicability of disclosure frameworks and human rights due diligence legislation to financial sector actors and their core activities, including downstream value chain relationships, by taking into account the specific characteristics of different types of financial actors;
(e) Ensure disclosure requirements go beyond statements of policy and include mandatory reporting on actual outcomes, identified risks and the effectiveness of human rights due diligence processes and grievance mechanisms;
(f) Ensure that regulatory disclosure frameworks include specific and detailed disclosure requirements on contemporary forms of slavery, enabling investors and other stakeholders to appropriately assess corporate performance and exposure to slavery-related risks, as well as broader reporting requirements on interrelated human rights risks, such as inequality, discrimination and decent work deficits, in a manner that aligns with globally accepted standards;
(g) Promote initiatives for ensuring access to reliable and comparable data on human rights risks for financial sector actors, particularly at the sectoral, asset and value chain levels;
(h) Integrate the prevention of contemporary forms of slavery into regulatory frameworks, including public procurement rules, import regulations such as an import ban for products made with forced labour, and sustainability-related taxonomies.
(i) Develop and apply survivor-centred financial services that address the specific needs of survivors, in collaboration with financial sector actors, including flexible identity verification procedures, referral pathways with civil society organizations and credit reference agencies, and tailored account structures that minimize risks of revictimization and financial exclusion;
(j) Strengthen anti-money-laundering financing frameworks that contribute to the prevention of contemporary forms of slavery through the following measures:
(i) Expand predicate offences to all forms of contemporary forms of slavery and issue specific guidance to financial sector actors in collaboration with international and regional organizations;
(ii) Strengthen enforcement efforts through multi-stakeholder cooperation, including with financial sector actors, academic institutions and civil society organizations, to refine detection methodologies and “red-flag” indicators;
(iii) Enhance international criminal justice cooperation;
(iv) Advance regulation and supervision of cryptocurrencies and related platforms to address illicit financial flows linked to forced criminality and other contemporary forms of slavery;
(k) Ensure the financial inclusion of marginalized/disadvantaged groups, by facilitating access to financial services through proportionate and appropriate identity verification requirements and protective measures;
(l) Ensure that State-owned financial institutions, development finance institutions, export credit agencies and other State-backed entities fully integrate human rights due diligence into their operations, governance structures and financing decisions;
(m) Ensure inclusive multi-stakeholder dialogues when developing regulatory and policy frameworks that support financial sector actors in playing an effective role in preventing and addressing contemporary forms of slavery.

The Special Rapporteur recommends that financial sector actors overall:
(a) Adopt and continuously implement comprehensive human rights policies, human rights due diligence processes and operational-level grievance mechanisms in line with the Guiding Principles, encompassing all relevant business relationships and their own activities, including downstream value chains;
(b) Meaningfully involve affected rights holders, such as survivors, civil society organizations and workers’ organizations, throughout;
(c) Ensure that digital and artificial intelligence tools deployed in business and human rights practices and other responsible finance and investment activities are designed, developed, procured and utilized in a manner that is inclusive, transparent and free from discriminatory biases, with appropriate human rights safeguards;
(d) Develop and implement survivor-centred financial inclusion initiatives, ensuring that risk management practices do not inadvertently exclude or penalize survivors of contemporary forms of slavery and other human rights violations;
(e) Explore and expand innovative financial mechanisms, such as social impact bonds, outcome-based financing, microfinance and microinsurance, to address contemporary forms of slavery and its root causes;
(f) Engage in and initiate collective efforts to address contemporary forms of slavery, including initiatives for ensuring access to reliable and comparable data on contemporary forms of slavery and other related human rights risks.

The Special Rapporteur recommends that financial sector actors that hold regulatory or self-regulatory authority, such as stock exchanges or financial market regulators, consider developing, strengthening or mandating disclosure rules or guidance for the entities under their jurisdiction or within their scope.

The Special Rapporteur recommends that international or regional financial institutions:
(a) Ensure that their financing and other activities do not facilitate or contribute to contemporary forms of slavery;
(b) Align their environmental and social safeguard frameworks with the Guiding Principles by addressing risks across the full value chain – beyond tier 1 suppliers – to include lower-tier suppliers where contemporary forms of slavery are more prevalent, and by ensuring that safeguards cover both goods and services and apply across all sectors and types of procurement.

The Special Rapporteur recommends that rights holders, survivors/victims, civil society organizations and workers’ organizations:
(a) Continue to play a central role in advocating for the rights of survivors/victims, promoting accountability through independent monitoring and conducting research to inform financial sector practices;
(b) Engage actively in multi-stakeholder initiatives, financial sector dialogues, corporate grievance mechanisms and policy development processes, to ensure that critical voices are reflected in decision-making and that financial sector actors adjust their services to the needs of those with lived experience;
(c) Continue to collaborate with financial sector actors and regulatory authorities to design and implement survivor-centred financial inclusion measures that support economic empowerment and rehabilitation.