A Focus on the “S” in “ESG”: Fighting Modern Slavery & Human Trafficking in Supply Chains
November 10th, 2021 •
Hannah Tichansky • Reading Time: 9minutes
A Conversation with Rani Hong, Social Entrepreneur and CEO of Freedom Seal Global
Rani Hong is an Indian-American social entrepreneur and a survivor of child trafficking. She is one of the world’s leading voices in the fight against modern-day slavery.
The below interview originally appeared in Risk & Resilience Magazine produced by Aravo Solutions. The inaugural issue of Risk & Resilience focuses on Environmental, Social, Governance (ESG), and includes Rani Hong’s interview on modern slavery and human trafficking. Read the full interview below.
Thank you for joining us, Rani. Could you introduce yourself and the work you do at Freedom Seal Global?
Rani Hong (RH): I am the CEO of Freedom Seal Global. When I look at the issue of supply chains and risk management systems I come from a different perspective. I was stolen from my family at the age of seven in India, and the criminals that were involved in my situation were directly related to a company that was conducting financial crimes. Today, I’m here to bring a face to the issue – there are human costs associated with financial crimes such as forced labor.
I have been working with the United Nations for the past seven years and realized that the private sector can have a huge influence in fighting human trafficking. I believe they have an incredible opportunity to leverage their supply chains to help lead the way to give freedom to millions of other little girls, who like me, were imprisoned, silenced, and unable to speak. Today I speak for those without a voice.
From your experiences, why is ESG, and in particular Modern Slavery/Human Trafficking (MSHT) important?
RH: We know ESG is a hot topic in today’s environment which is good because we now can move forward on these initiatives to bring real change. Most companies are focusing on the “E”- the environmental issues. At Freedom Seal, we prioritize the social “S” within ESG. I believe we need to start shifting as a culture to really focus on the social elements. There are true human costs associated with these crimes.
Today at Freedom Seal we have an emblem, a Seal, to show which companies are taking proactive steps to fight financial crime and modern-day forms of slavery using ESG practices. If your company can show us how you’re preventing modern slavery, and how you’re committed to this issue, then you can earn our Freedom Seal. Freedom Seal recognizes that this issue is a continuous improvement process. We cannot fix everything overnight, but I want to encourage companies to apply and commit to doing better and together we can help prevent forced labor in supply chains. We can measure progress on what we’re doing and how together we can accomplish the mission of being a voice for millions of children around the world.
In addition to the social elements, sometimes companies think in terms of bottom lines- are there going to be financial and competitive advantages to having a Freedom Seal?
RH: Yes, I do believe there will be a revenue increase when companies adopt these best international practices, and by having a symbol, the Freedom Seal, to tell the world they are committed to doing their part. In addition, consumers are watching what companies are doing in the “S” of ESG. We know organizations really do care about reputational risks; therefore, we wanted the Freedom Seal to be rewarded to those who take concrete actions. Our label will help to protect your brand for years to come, therefore bring an ROI to your organization.
How is MSHT related to financial crime? Where is that connection?
RH: When we talk to those in financial institutions, we often talk about anti-money laundering (AML) and there is the perception that modern slavery isn’t involved. However, there is a key correlation between AML and these practices. In many cases, if we follow the money within financial organizations, like banks, we can see where it intersects with human trafficking. The key is to find those red flags – the Freedom Seal has a training program that is specifically able to train your staff to look for indicators of modern slavery practices. It’s not easy, but with the right tools, we can help you detect some of these red flags within your supply chains.
If a company is looking to eliminate these practices or apply for a Freedom Seal, how can they get this process started?
RH: Just starting the conversation is an important step forward. We help companies start this conversation within their operations and then we take them through Freedom Seal criteria which are based on international best practices that are stated in the UNGP and OECD Guidelines for Multinational Enterprises. Our modern slavery standards are first in the world: we look at how you are managing your supply chains. Are you conducting ongoing monitoring? Or is it just a once-a-year check, which in my opinion, is not enough in today’s risk climate.
Criminals are taking advantage of loopholes in a company’s supply chains so we need to monitor these more closely- one way is to work with us and use our technology tools and platform. Freedom Seal’s specific criteria are aligned with the United Nations Guiding Principles in which international countries agreed on what needs to be met. At Freedom Seal, we’re measuring against those criteria and looking at legislation (specifically within the EU) that is starting to make mandatory requirements to perform human rights due diligence. And that’s where Freedom Seal comes in. Our third-party solutions help to make sure you are meeting those regulations and are prepared for future challenges when it comes to social compliance.
These regulations require more thorough supply chain due diligence, and understanding not just your third parties, but your fourth parties and beyond. This must create challenges for some companies?
RH: It can be very difficult to see down the supply chain. Our proprietary software we built has a risk assessment tool specifically for forced labor. This, in turn, helps companies be more confident when it comes to preventing forced labor in their supply chains and make sure you are seeing every component where modern slavery may exist. We also realized the challenges of being a smaller enterprise, so we also offer a small/medium enterprise certification, which is for those companies who are below $10 million in gross revenue.
And education is so important. Being able to sort out the signs is an important piece of beginning to address these issues.
RH: We take that first step to educate our customers because I think that’s often a challenge for those who may want to turn a blind eye. But today’s consumers are not going to allow you to do that anymore. If you want to be in the business, you have to address these issues and we’re here to help you along the way. Our Freedom Seal Certification framework can assist you in your journey to improve operations.
Another important step is showing proof that you are following regulations. Here in the U.S., we have the California Transparency Act, and in the UK, there’s the UK Modern Slavery Act which both require training, due diligence, and transparency. Building resilience is key, but we take it on a step-by-step basis. Back to my personal story, I had to learn how to be resilient in navigating life and navigating through the challenges of being trafficked as a seven-year-old little girl. But today I’m so proud to bring solutions such as the Freedom Seal to help the private sector to build their resilience story.
How connected are Boards in understanding that there could be human trafficking and modern slavery in their supply chain?
RH: More than ever we need senior management and boards to get involved in identifying and eliminating these practices. Increasingly, regulations require the board chair to sign off in saying their company is in compliance with legislation; however, we found many need Freedom Seal’s tools to help senior management demonstrate their evidence to regulators. When our customers sign up to #EarnTheSeal they take advantage of many of the benefits offered to them through professional services.
It’s not a checkbox exercise anymore- if you see anything in your supply chain, you now have to do something about it.
RH: Absolutely. We also provide a consulting gap analysis and gap assessment tools. And I’d like to make it clear that we’re not asking for a hundred percent slave-free supply chains. That’s impossible. However, I (and regulators) am asking companies to show us the steps they’ve taken that align with regulations. And we need to be able to utilize all tools and resources to help us to get there.
This is not something that you can wait three years to do- if you wait too long, it will be too late. Companies need to start taking concrete steps today- it’s about progress, not perfection. Let’s tell the world we’re committed to this issue and to building a better world for our children. Transparency is everything.
Are there other benefits companies should know about when applying for the Freedom Seal?
RH: One other thing to consider is the benefit to trade. In the U.S., for example, governments want to know if products imported or exported were touched by forced labor or human trafficking- if so, they can deny these products entry. This is a strong statement and encourages positive change. With Freedom Seal, we’re aiming to have an emblem for products that proves companies have done their due diligence. This way, customs and border patrol will instantly know this product or this company is committed to preventing these crimes. This will help the products be accepted in the US quicker, but also increase company revenue. In fact, the U.S. Senate just passed a bill to ban all products from China’s Xinjiang region. There is an urgency for companies to start applying for The Freedom Seal now. One can go to www.thefreedomseal.com to take the first step of their application.
Five years from now, what conversations do you hope we’ll be having and what milestones do you hope we’ll have achieved?
RH: Our vision in the next few years is to stand with the private sector and organizations to do better when it comes to preventing forced labor in their supply chains. Consumers are demanding action. I know today’s conversation is more on the “E” in ESG, but in the next few years I’m here to help shed light on the “S”. I believe the “S” will be the next big focus in ESG and I would love to lead the way on this innovation and find partners that are willing to help us lead the way together. That will be a huge focus for us at Freedom Seal, and we’re right here to partner with you to help you through that journey.
What are the first steps companies should do to apply for a Freedom Seal? Visit the website?
RH: If your customers are interested in applying for the Freedom Seal go to the website, there’s a wealth of information there. And from there we take you through the process every step of the way. Again, it’s not about ticking a box. We’re equipping you to build a business of the future and one that is transparent and one that ends up making the world a better place.
Being certified by The Freedom Seal will help in key aspects of your business:
Visibility of your efforts in social matters in front of the market
Establish more robust control and compliance policies for risk management and reputational risk mitigation
Compliance with legal obligations in regulated markets
Meet requirements from international clients and partners that are certified by The Freedom Seal
At the age of seven, Rani was stolen from her mom and sold into the slave trade in India. She was finally reunited with her mother in 1999 and began her advocacy work against child trafficking. In 2006, Rani started her philanthropic work and founded the Tronie Foundation, a non-profit global organization focused on driving awareness of child slavery, with her husband Trong Hong, also a survivor of child trafficking.
Since 1999, Rani has advised many governments and has been at the forefront of an international effort to protect women and girls. Her most recent focus has been to eradicate the use of slave labor in all aspects of business. She has worked on behalf of people at risk of exploitation – protecting and empowering vulnerable groups and educating businesses and consumers about modern-day slavery.
As a social entrepreneur, Rani created the Freedom Seal, a certification for companies fighting against Human Slavery by committing to mitigating Financial Crime & Modern Slavery. The Freedom Seal symbolizes a future marketplace where forced labor has been reduced. It represents a dream come true for the estimated 40.3 million people, mostly children and women, still trapped in slavery.
Rani’s tireless efforts include several speeches before the UN General Assembly and have met with various world leaders. Including Presidents of the world. In 2011 Rani was appointed by the UN as a special advisor to the United Nations Global Initiative to Fight Human Trafficking, helping to establish the Sustainable Development Goal 8, and establishing the first-ever World Day Against Trafficking in Persons. Rani has appeared in numerous broadcast and media interviews including The Oprah Winfrey Show, CNN, BBC, Euro News, and other international media. On November 6th, 2017 Rani joined the Press Office of the Holy See to ask for concrete action against human trafficking, in which over 25 journalists helped carry her message around the world and speak for those without a voice. In 2018, Rani was named Woman of the Year for her home country of India.
Today, Rani dedicates her time and energy to efforts that lead toward a greater global understanding of human trafficking and continues to speak for those without a voice and for those who are imprisoned, enslaved, silenced, and unable to tell their own stories.
Rani’s ability to overcome trauma, loss, and grief has inspired leaders from all over the world to join the global movement against human trafficking. Rani lives in Olympia, Washington USA with her husband and children.
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