Modern Slavery Statement for the 2021 financial year
This statement is our response to Section 54, Part 6 of the Modern Slavery Act 2015 and sets out the steps that Rathbones is taking to ensure slavery and human trafficking is not taking place in our supply chains or in any part of our business. This statement covers all entities that sit under Rathbones Group Plc*, as the legal parent entity and was approved by the board of directors on 4 May 2022.
Rathbones provides individual investment and wealth management services for private clients, charities, trustees and professional partners. We have been trusted for generations to manage and preserve our clients’ wealth. Our tradition of investing and acting responsibly has been with us from the beginning and continues to lead us forward. The business has over 2000 employees in 14 locations across the UK, including Jersey.
We are committed to investing for everyone’s tomorrow. This commitment stems from our purpose in society and is built on the foundation of our values. Thinking, acting and investing responsibly guides our actions and drives us to pursue our strategy with consistency and resilience, year after year. It also keeps us on course as we adapt and respond to the unprecedented crisis that the world is currently facing.
As a business we recognise our responsibility to respect those who work within Rathbones and those who are in our broader stakeholder network, including but not limited to those who work within our supply chain. We support the International Labour Organization’s standards and the Universal Declaration of Human Rights. In July 2021, we were pleased to become a signatory to the United Nations Global Compact. This commitment not only supports an objective that aligns with our own fiduciary duty as a business to help build a better world for future generations, but also recognises our position as stewards and allocators of capital.
Rathbones recognises the role we can play through the investments we make on behalf of our clients. Our stewardship team is active and collaborating to drive change in this space. As a firm we are committed to maintaining and improving our practices to identify and mitigate any instances of modern slavery related to our own operations and our supply chain and this remains the focus for our statement.
As a UK-based financial services business, Rathbones has a relatively low risk of modern slavery within its employee base and direct supply chain. Indirect suppliers further down our supply chain however present a potential elevated risk. Whilst we recognise there may be risk further down our supply chain at this time our approach focuses on those where we have direct control.
For direct employees our People team, continue to ensure Rathbones is an equal opportunity employer and review our processes regularly so that we can have confidence that any external recruitment agency understands our commitment to responsible and transparent employment processes. We carry out pre-employment checks to make sure that anyone we employ has the right to work in the UK or Jersey, including a disclosure and barring (DBS) check. Once initial employment checks are satisfactorily completed employees are placed on a contract that clearly stipulates their expected working pattern. All employees can apply to alter this by following the steps laid out in our flexible working policy.
Our supply chain
In 2021 again the majority of our spend was UK focused. Our top five suppliers by spend were all UK based and the majority of procurement outside the UK was in the US and represented spend on IT and financial and professional services. Of the remaining purchasing one country India, is identified as a higher risk country**. Here we purchased software supply and support services representing 0.3% of our total spend.
Our main procurement activities in 2021 included:
- Building equipment and services (IT, facilities and facilities services)
- Professional and ancillary services such as accounting, audit and HR
It should be noted that as we have introduced strategic change programmes focused on IT and infrastructure, spend in these sectors have seen an increase. This alongside the continued smaller spend due to the impact of COVID-19 on other sectors include hotels, restaurants and transport, shows a different supply chain to pre-COVID times. We will regularly review our spend and suppliers in these sectors going forward to ensure an accurate assessment of the risk is held.
In addition to our own actions in this area one of the focal points of our stewardship programme is modern slavery. Non-compliance by any company poses a serious risk to long-term performance and questions the suitability of investing in these companies. In 2021 Rathbones continued to lead a votes against slavery campaign. Supported by 97 investors representing £7.8 trillion and partnering with a respected international NGO they targeted 61 laggard companies with the aim of full compliance to the Act by the end of the engagement process. At the end of 2021 59 companies were compliant, with the remaining two companies becoming compliant in January 2022. You can read more on our engagement on modern slavery in our responsible investment report and our 2021 votes against slavery report.
As a financial service business, Rathbones does not have significant physical inputs into its business operations, but we understand that no supply chain is risk-free, and that greater risk may be present further down the supply chain with indirect suppliers. We continue to follow a risk-based approach to our supply chain and focus on those suppliers that we have a direct link to.
Following the work undertaken by a third party in 2020 to assess modern slavery risk in our supply chain. We continue to consider that our supplier risk profile remains predominantly unchanged since our initial assessment in 2018. The majority of our supply chain retained a low risk of modern slavery however, a few areas were considered to carry a higher risk. The key areas of elevated risk were identified as follows:
- Direct risk – UK construction and India software supply and services
- Indirect risk – UK soft services (cleaning, hospitality) and UK retailers (procurement of products)
These four areas represent a very small proportion of our total procurement expenditure and across the categories we have requirements in place to minimise any likely risk. We have a number of measures, through our due diligence considerations, to tackle our direct risks particularly regarding UK construction, including ensuring any contractor we employ has policies and standards in place that comply with and ensure their supply lines are compliant with the Modern Slavery Act and its principles.
Through the identification of the procurement areas with elevated risk, we are embracing the opportunity to strengthen oversight, control and due diligence processes within our procurement practices, including through increased supplier engagement. At the end of 2020 we updated our supplier onboarding process which will ensure suppliers undergo appropriate due diligence. To support this process new supplier set up guidance was issued. In 2021, we engaged our critical, strategic and preferred suppliers on their approach to environmental and social issues, including their approach to modern slavery and publication of statements. At the end of 2021, 66% of those surveyed had responded. We will work to achieve 100% in 2022 and include the survey to include the supplier onboarding and renewal process. We will engage with any supplier whose response raises concerns. Conversations will be integrated into our standard contract review process, allowing us to regularly engage with our supply chain to deliver on our common ambitions.
To further manage our indirect risk, we include steps in our due diligence to support supplier selection such as the requirement of the business to procure FSC certified paper stationery products. Whilst the FSC certification is more commonly understood to focus on environmental requirements it also incorporates core labour requirements into its certification system.
Governance and policies
The boards of directors of all subsidiary entities are in scope for this statement and approve the information disclosed in this statement. Operational responsibility for reviewing our approach to modern slavery sits with our responsible business committee, which reports into the board twice a year via our CEO who co-chairs the committee with the Managing Director of Rathbones Investment Management. Our oversight and control director oversees our supplier management framework, supported by our corporate responsibility manager on modern slavery specific risks.
For employees, suppliers, clients and third parties our whistleblowing policy encourages and enables reporting on anything of concern and explains how they can do so confidentially. Concerns can be raised through a number of channels, including contacting our Chief Internal Auditor, the Non-executive Director of the Audit Committee who acts as our whistleblowing champion or by emailing firstname.lastname@example.org.
As part of our commitment to upholding the highest standards of governance and risk management we have a set of policies and principles in place that are relevant to managing the risk of modern slavery and promotion of wider decent working practices. These policies are reviewed regularly and updated to reflect any material changes that impact our business.
- Whistleblowing policy
- Travel policy
- Recruitment policy
- Equal opportunities policy
- Flexible working policy
- Responsible investment policy
Our approach reaches beyond our supply chain to our employees and those we employ on a contract basis. We are a “Living Wage” accredited employer and this commitment extends to requiring sub-contractors, such as cleaners, to be paid at least the Living Wage level.
We continue to build capacity within Rathbones to manage the risk of modern slavery, and understand risk exposure within our operations, our supply chain, and our services. During 2022, our focus will be on further integration of our environmental and social review, alongside the continued strengthening of our supplier due diligence processes. We will review a wider internal training programme for key employees to support awareness and understanding. We believe that these actions will support the strengthening of our framework as we await the outcome of the proposed new mandatory requirements.
Paul Stockton, Group Chief Executive
4 May 2022
* For a list of the company’s subsidiary undertakings please see p198 of our 2021 Report and Accounts
**Global slavery index https://www.globalslaveryindex.org/