CASE STUDY / AMP CAPITAL
CASE STUDY
The Real Estate business hired a consultant to explore what it should do and then it implemented legal contract clauses concerning modern slavery, requesting that suppliers comply with their policy and flag any issues. Next, Nunn and colleagues, including Procurement and Supply Chain manager Paul Egan, got together with the heads of sustainability at 15-20 competitor companies to create a common set of questions to ask suppliers via an online platform to help them collect and evaluate responses. “There is work we can all collaborate on when it’s a non-compete space, like understanding our shared supply chain partners better. If you can come together through your industry association and ask the questions as one, you will save suppliers’ time and hopefully get better answers and higher penetration through your supply chain.” Thousands of suppliers were entered onto the new system and surveys were sent out. Of the 1,000 suppliers to AMP Capital’s Real Estate business who received a questionnaire, Nunn said about a third have responded so far. “That gives an indication that it is pretty early days in terms of modern slavery engagement with Australian construction and real estate supply chains. Many are being asked these questions for the first time in 2020/21 because it’s the first year businesses have had to comply with the Australian legislation. It’s still new to them so the majority are not actively managing modern slavery yet. For the third of businesses who have indicated it's on their radar, they tend to be our slightly more sophisticated suppliers or closer supply chain relationships.”
The real estate division, which manages around 80 industrial buildings, office blocks and shopping centres in Australia and New Zealand, is ahead of its competitors at tackling modern slavery risks because it started acting on it ahead of Australian legislation in 2018. “AMP Capital owns infrastructure assets in the UK, so when the UK’s 2015 Modern Slavery Act came out, the decision was made to apply that framework globally.” The Real Estate business oversees hundreds of millions of dollars of spend on operations, energy procurement and marketing. The operational suppliers who provide security and cleaning services for its buildings are typically local, but the products and equipment they use are often from overseas; and while developers may source glass, steel and concrete domestically, other materials such as stone might be purchased from India. For marketing spend, AMP Capital deals directly with Australian suppliers, but these suppliers may be sourcing some items, such as Christmas decorations, from Asia. “So you might be dealing with first tier Australian building contractors operating under Australian labour laws, but they're getting materials from all over the world, where regulatory protection and working conditions may not be as good,” says Nunn. “We wanted to be proactive. Modern slavery is clearly happening in our global supply chain, so we wanted to be diligent to try to find and remediate it. It’s this approach that has led us to take a pragmatic route to finding it, as we focus on engaging with select suppliers.” So two years before Australian law was even introduced, Nunn and colleagues started examining how to start seeking out and eliminating modern slavery from their supply chains.
S PEAKING FROM A BRIGHT OFFICE in his newly built, energy efficient passive house, Chris Nunn lives to improve the planet both at home and at work. “I’m passionate about sustainability and have chosen a very vocational career path,” he says. “The house and everything I do in my life is very much aligned to my work, which is really important to me.” Nunn is Head of Sustainability & Platform Operations for AMP Capital’s real estate business, which has an ambitious 2030 sustainability strategy. The key environment, social and governance (ESG) issues it is focused on addressing are energy and climate, waste, biodiversity, community, equity and diversity and supply chain. In this role Nunn is also heavily involved in rooting out and remediating any modern slavery found in the company’s supply chain – a proactive position that is not only the right thing to do but that adds to and protects the commercial value of the business. “We have a very ambitious approach to sustainability and we see modern slavery as a key area where we can show leadership and solve a problem,” says Nunn. "As a global investment manager, our work on modern slavery is enormously significant for both us and for our clients who are increasingly oriented to and sensitive to ESG matters, and are attuned to modern slavery risks.” He says it is not only tenants and users of their buildings who are increasingly aware of the potential for modern slavery in company supply chains, but it is also “really important to the people who work at AMP Capital that we're doing something about this.”
SHOWING LEADERSHIP ON MODERN SLAVERY
Beyond compliance
AMP Capital then hired State of Flux to help review the questionnaire responses more fully. By incorporating key modern slavery risk indicators, the State of Flux project team developed a methodology to identify a risk profile for each supplier. This helped AMP Capital to decide which high-risk suppliers it would like to work with first to examine their supplier base in more detail. “We’re now working with State of Flux to choose three high-risk tier one suppliers to partner with this year to do a deep-dive into our shared supply chains. We’re going to try to get way down into tier 4, 5, 6, 7, 8, 9, 10…who knows how deep we can go. We’re selecting one from the development part of the business, one operational supplier and one from marketing.” The State of Flux project team, which includes subject matter expert Carolyn Kitto, National Director for NGO Be Slavery Free, is engaged to help AMP Capital find, detect and remediate modern slavery in their Real Estate business. Kitto brings a wealth of experience having already worked in 51 countries in the past 22 years raising awareness and campaigning for change against modern slavery and human trafficking. →
Reaching out to suppliers
The first step on this journey was documentation. This included ensuring company policies and procedures were updated to cover modern slavery risks and take steps to quiz suppliers about their own supply chains, asking what, if any, action they were taking. “We produced a disclosure statement and commenced engaging consultants and working on business unit- specific responses and controls,” says Nunn.
WE WANTED TO BE PROACTIVE. MODERN SLAVERY IS CLEARLY HAPPENING IN OUR GLOBAL SUPPLY CHAIN, SO WE WANT TO BE DILIGENT TO TRY TO FIND AND REMEDIATE IT.
How AMP Capital’s real estate business became a front runner in Australia’s building sector at tackling this risk.
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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