In an exemplary move to uplift the “social” component within the Environmental, Social, and Governance (ESG) framework, the Canadian Parliament, in May 2023, passed Bill S-211.
The Act, designed to mitigate the risks of child or forced labor within the supply chains utilized by Canadian businesses, is set to become effective from January 1, 2024. Consequently, all impacted organizations must submit a detailed report, adhering to the bill’s stipulations, by May 31, 2024.
Moody’s Analytics recently outlined how it can help companies meet compliance.
The crux of Bill S-211 seeks to actualize Canada’s global commitment towards eradicating forced and child labor, thereby instituting obligatory reporting from two main categories: governmental institutions engaged in producing, purchasing, or distributing goods within and outside Canada, and entities responsible for producing or importing goods produced outside the nation’s borders.
The Act encompasses various entities, including corporations, trusts, partnerships, or any other unincorporated organizations involved in activities such as producing, selling, distributing, or importing goods into Canada. Furthermore, to fall under the purview of the Act, an entity must be listed on a Canadian stock exchange or maintain a business presence in the country, and simultaneously meet at least two out of three specified criteria during one of its two most recent financial years: possessing $20m or more in assets, generating $40m or more in revenue, or employing 250 or more staff members.
Moody’s Analytics emerges as a pivotal player in assisting clients to adhere to the requirements of Bill S-211 by introducing a contemporary slavery risk assessment module and offering profound ownership and screening data. This ensures companies can proactively pinpoint, evaluate, and abate the risks of modern slavery and forced labor lurking within their supply chains. The module, customised with 8 risk codes, is formulated to assess the risks pertinent to contemporary slavery typologies, whilst the ownership and screening data grant additional scrutinization layers.
Importantly, the ownership and company modern slavery statements forge insights into the relationships intertwining various entities within a supply chain. This scrutiny becomes indispensable for identifying potential perils. Thus, these solutions extend beyond a one-off event – initial screening transpires during onboarding, with ensuing, equally pivotal, continuous monitoring. This perpetual observation will yield alerts pertaining to any material alterations to suppliers, enabling companies to swiftly respond to possible issues and enact suitable risk-mitigation measures.
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