Majority of Alberta businesses concerned about meeting new anti-slavery reporting timeline: KPMG poll
Challenges in mapping and managing supply chain add worries about potential company risk exposure
CALGARY, AB, Nov. 2, 2023 /CNW/ - With most Alberta businesses preparing to comply and address new federal anti-slavery legislation, more than half (62 per cent) say they are worried about their ability to meet reporting timelines, finds a new KPMG in Canada survey.
KPMG's 2023 Private Enterprise™ Business Survey also found that 57 per cent of small- and medium-sized businesses (SMBs) in Alberta are concerned about their ability to map out forced labour and child labour risks across their entire supply chain, and half worry about their ability to manage those risks.
Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act, which takes effect on Jan. 1, 2024, requires public and certain private companies to review and assess working conditions in their supply chain and first report on their efforts to eliminate these practices by May 31, 2024. Companies will be required to report annually to show continued progress in reducing forced and child labour practices.
"The new modern slavery law coming into effect is adding a sense of urgency for companies to take a hard look at their supply chains, understand where they could be exposed to forced labour and child labour risks, and take action," says Jana Hanova, a Calgary-based Global Infrastructure Advisory partner in ESG at KPMG in Canada. "Compared to the national average, our survey shows most companies in Alberta have started to review or address gaps in their current supply chain management system to prepare for disclosure, yet they are still the most concerned about meeting reporting timelines."
- 62 per cent of the 78 companies surveyed in Alberta are concerned about meeting the May 2024 reporting timeline. This compares to the national average of 58 per cent among 700 SMBs surveyed across Canada
- 75 per cent already have a program to prevent and remedy modern slavery in their extended supply chain and any goods they import (vs. 59 per cent nationally)
- 74 per cent have started to review gaps between current supply chain management systems and new legal requirements (vs. 63 per cent nationally)
- 50 per cent are concerned about their ability to manage risks of forced and child labour through their full, extended supply chain (vs. 54 per cent nationally)
- 53 per cent are "really worried" that somewhere in their supply chain they'll be exposed and face a consumer backlash and/or stiff financial penalties (same nationally)
- 64 per cent already conduct regular risks assessment related to working conditions and human rights in their operations and supply chains (same nationally)
- 58 per cent are concerned about increased trade and customs risks when importing goods into Canada (e.g., any imported mined, manufactured or produced goods could be seized at the border) (vs. 56 per cent nationally)
While companies are taking important steps to get into reporting shape and manage any potential reputational, financial, trade and legal risks and penalties for non-compliance, it's important that they also understand and consider how modern slavery disclosures fit into their broader supply chain and environmental, social and governance (ESG) strategy, adds Ms. Hanova.
"As ESG risks become better understood, companies are taking more action to trace their source materials and products and increase the resiliency of their value chain. These sustainability-minded decisions can have a positive impact in the long run," says Ms. Hanova.
KPMG in Canada surveyed business owners or executive level C-suite decision-makers at 700 small-and-medium-sized Canadian companies between August 30 and Sept. 25, 2023, using Sago's premier business research panel. Eighty-two per cent of the SMBs surveyed are privately held and 18 per cent are publicly traded. Forty-one per cent are family-owned businesses. A quarter of the companies surveyed have more than C$500 million and less than C$1 billion in annual revenue, a quarter have more than C$300 million and less than $500 million in annual revenue, 23 per cent have between C$100 million and C$300 million in annual revenue, and 26 per cent have between C$10 million and C$50 million in annual revenue. No companies were surveyed under C$10 million.
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SOURCE KPMG LLP
For media inquiries, please contact: Katarina Lukich, National Communications & Media Relations, KPMG in Canada, 416-468-7729, [email protected]
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