As the Canadian federal government gears up to implement its new anti-slavery legislation, a recent KPMG survey reveals that 62% of Alberta businesses are anxious about meeting the required reporting timelines.
The law, titled “Fighting Against Forced Labour and Child Labour in Supply Chains Act”, is set to take effect on January 1, 2024. Under its provisions, both public and select private companies must assess working conditions in their supply chains and provide an initial report on their efforts to eradicate forced and child labour practices by May 31, 2024.
Thereafter, annual progress reports will be mandatory.
Jana Hanova, a Calgary-based Global Infrastructure Advisory partner in ESG at KPMG in Canada, noted the impending legislation has added an urgency for businesses to scrutinize their supply chains. “The new modern slavery law requires companies to identify potential forced and child labour risks and act accordingly,” Hanova said.
Although Alberta companies are making strides to identify and rectify gaps in their supply chain management, they remain the most concerned about adhering to the forthcoming reporting schedules.
From the survey’s key findings:
- 62% of the 78 Alberta companies surveyed expressed apprehensions about the May 2024 deadline. In comparison, this figure stands at 58% for the 700 SMBs surveyed nationwide.
- 75% of these businesses already have strategies in place to counteract modern slavery in their extended supply chains, as opposed to 59% on a national level.
- 50% are concerned about managing risks of forced and child labour throughout their entire supply chain, slightly below the national average of 54%.
- 53% fear potential exposure in their supply chain that could lead to consumer backlash or financial penalties, a sentiment mirrored nationally.
Despite these concerns, Hanova emphasized the significance of understanding how these disclosures on modern slavery integrate into a company’s broader supply chain and environmental, social, and governance (ESG) strategy. She added, “With a growing understanding of ESG risks, companies are now more proactive in tracing their source materials, strengthening the resilience of their value chains, and making sustainability-centric decisions, which will be beneficial in the long run.”
The survey, which ran from August 30 to September 25, 2023, targeted business owners or executive-level decision-makers from 700 small and medium-sized Canadian firms. Notably, 82% of these companies are privately held, with 18% being publicly traded.