Tackling modern slavery with your super

7 December 2021

Your super is invested in a range of assets. Managed responsibly it can have a positive impact on environmental and social issues like climate change, gender inequality and modern slavery. Change doesn’t happen overnight and isn’t easy to achieve - but tackling problems head-on through a focused investment program means together we can make a lasting impact.

Imagine working long shifts to feed your family in a physically demanding job in which you face wage and superannuation theft, exploitation and intimidation.

This is the daily reality for many people affected by modern slavery– and not just in developing countries. This is taking place in our own backyards, in Australian businesses and office buildings.


What is modern slavery?

Modern slavery is the severe exploitation of people for personal or commercial gain. It’s a social issue affecting many industries. For example, vulnerable workers can be disadvantaged by companies looking for low pricing, which can result in low wages.


Working for members’ best financial interests - addressing modern slavery in the cleaning industry

The cleaning industry is one example where Australian workers are affected by modern slavery issues. Cleaning services are hired by thousands of companies as part of their supply chain – the network of businesses that keeps a company operating. Almost 89,000 of AustralianSuper members are employed in the cleaning industry.1 As a leading super fund we believe it’s important to advocate for members’ best outcomes.

To address modern slavery practices in the cleaning industry, AustralianSuper co-founded the Cleaning Accountability Framework (CAF). This partnership started in 2012 to improve conditions for cleaners through responsible supply chain management.

We collaborate with investors and industry groups to strengthen the impact we can have tackling this issue. This focus is part of our broader approach on environmental, social and governance (ESG) issues, including climate change, gender equality.


Understanding modern slavery in the cleaning industry

The cleaning industry is one of the most vulnerable to modern slavery in Australia. Many of the 150,000 cleaners are migrant workers on visas.2

Poonam Datar, chief executive officer of CAF, says it’s common for cleaners to face immigration-related threats, coercion and deception.

‘Often workers can be threatened into working longer hours or taking less pay because the employer or supervisor says they’re going to report them to the authorities,’ she says.

Cleaning is a service which is usually outsourced, so there’s an issue in rising costs associated with it. Companies paying for the service want the best deal they can get, so to win contracts cleaning businesses are forced to keep prices low – which can often negatively affect workers.

To win work, employers need to put forward a price, which means they can’t pay their workers the right amount,’ Poonam says. ‘They have to cut corners to be able to win work.’


Tackling modern slavery to improve performance and ESG outcomes

A strong focus on ESG is part of our approach to responsible investing and delivering strong long-term returns* to members. In relation to the cleaning industry this allows us to:

  • advocate for fair working conditions and better financial outcomes for the thousands of AustralianSuper members who are working in the cleaning industry;
  • use our size and scale to partner with investor and industry initiatives which drive global change on ESG issues, which could create superior long-term returns for members;
  • foster more ethical and transparent workforce practices in the companies we invest in and their supply chains to support more sustainable business models. These companies make better long-term investments as they are more likely to deliver sustainable long-term earnings.

Sandra Silea, part of the ESG and Stewardship team at AustralianSuper, says because cleaners work across so many businesses, it’s also an important investment risk to manage. ‘It’s important to ensure members get their proper working conditions, rights and entitlements, including superannuation.’

‘Many of the businesses we invest in rely on the cleaning services industry to run day-to-day. ‘This means it’s vital for us - as a large investor - to make sure poor practices such as modern slavery are addressed. This helps us create long-term value for members who’ve entrusted us with their financial retirement outcomes.’


CAF – Cleaning Accountability Framework

To find a way to break the cycle of exploitation AustralianSuper, the United Workers Union and a coalition of industry members came together in 2012. The result is CAF, an independent group of businesses, government, unions and academics working to improve labour standards in Australia. To uphold ethical practices, CAF engages the entire cleaning supply chain: cleaners, tenants, contractors, property owners, facility managers and investors.

‘By getting the whole supply chain on the same page, it sets a clear standard for what needs to be abided by in the industry,’ says Sandra.

‘From the worker up to the asset owner, everyone’s really clear about what needs to happen. ‘That clarity sparks candid conversations and tangible actions that lead to enhanced outcomes for individuals, but also for the businesses, the property owners, and the asset owners and funds like us,’ she adds.

Under the Modern Slavery Act 2018 , employers have a legal obligation to know their supply chain and business. ‘Businesses are starting to open the door and ask questions about procurement practices and, for the most part, there’s a genuine understanding that accountability flows through the supply chain,’ says Poonam.

Under the Modern Slavery Act 2018, employers have a legal obligation to know their supply chain and business.
Educating workers about their rights

Sandra says that CAF also has a major focus on educating and empowering cleaners to understand their rights and speak up if something isn’t right.

‘The feedback we’re getting is that workers are starting to have candid conversations with their employer about workload and resourcing that weren’t happening before. So we’re really seeing systemic change down to the individual worker level, and I’m really proud of that.’

Poonam says that responsible investors like AustralianSuper who advocate for sustainable supply-chain management make a big difference to workers on the ground.

‘An investor can go to a fund manager or a property they own directly and says it must be CAF-certified to comply with its social-impact strategy. It’s as straightforward as that,’ she says. ‘It sends a clear signal to the market that if you want to continue getting these sorts of investors on board, then you need to be managing your ESG risks.’

‘An investor [like AustralianSuper] can go to a fund manager or a property they own directly and say it must be CAF-certified to comply with its social-impact strategy.’ Poonam Datar, chief executive officer, CAF.

The future for CAF

CAF has already made a positive impact to the lives of many people working in the cleaning industry.

That next level is a building certification framework, which will independently assess a building’s cleaning supply chain against rigorous 3, 4 and 5-star standards. In future, Poonam wants standards like the building certification framework to be the norm, rather than a ‘nice to have’.

‘We’re currently where the environmental movement was about 20 years ago,’ she says. ‘There’s a number of certification schemes that exist around environmental and energy standards, but we’re probably one of the only labour rights standards that exists. AustralianSuper took a bit of a leap of faith at that early stage to make this work, and at the end of the day, CAF is alive and thriving.’



Responsible investing and ESG – an approach that delivers for members

As a significant global investor, we take a leadership position in the ESG space. We work directly with companies, so they understand ESG issues, and we help shape positive future outcomes.

* Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.

AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.

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