Let’s be honest: when I talk to Chief Financial Officers (CFOs) about modern slavery, I’m usually met with a version of the same question: “How does this affect my P&L?”

It’s a fair question. CFOs are paid to protect the company’s financial health. So, if I can’t answer that question in terms of risk, cost, and long-term value, I’ve already lost the conversation.

This post is my attempt to answer that question.

Risk that hits the P&L

At its heart, dealing with modern slavery is about doing the right thing. Companies can’t ignore the problems arising from human rights abuses in their supply chains. Modern slavery includes forced labour, human trafficking, and exploitation, and can happen anywhere, from suppliers to subcontractors. For CFOs, the risks include financial losses and reputational damage. If a company is linked to modern slavery, it could face fines, legal issues, and harm to its brand. The costs of preventing these problems are usually much less than the long-term damage from being involved in modern slavery.

Compliance is becoming a cost of entry

Laws about human rights and modern slavery are getting stricter. This shift is part of a broader trend we explored in our previous post on The Evolving Landscape of Human Rights Risk Management: Navigating Legislative Pressures and Benchmarking Frameworks. Many countries have rules requiring businesses to report on their efforts to fight modern slavery. For example, the UK and Australia have laws that demand public reporting, which can lead to serious consequences for companies that don’t comply. CFOs need to recognize that investing in measures to combat slavery is essential to staying compliant and avoiding financial penalties.

Brand equity is an asset – protect it

Today’s shoppers are more aware of ethical practices than ever. More consumers are choosing to support brands that care about social responsibility. Fighting modern slavery can improve a company’s image and build trust among consumers, leading to loyalty and better profits over time. For CFOs, a better brand reputation can mean more customers and a bigger market share.

Supply chain disruption = Financial disruption

Interestingly, combating modern slavery can improve business operations. Transparent supply chain practices not only demonstrate a company’s commitment to human rights but also enable better supplier management. By ensuring fair labour practices, companies can reduce turnover, increase productivity, and prevent disruptions caused by social conflicts or strikes. These improvements can positively affect profits, which is something CFOs will likely appreciate.

Think of this as CapEx, not OpEx

Finally, addressing modern slavery should be seen as a long-term investment, not just an immediate cost. By including anti-slavery measures in their business plans, companies can create a sustainable model that benefits everyone. CFOs who promote these changes can help their companies become leaders in ethical practices, attracting both investors and customers.

So where should CFOs start? I suggest three questions:

  1. Do we know where our supply chain ends, and who works there?
  2. Are we treating modern slavery as a compliance cost, or as a risk to be managed?
  3. When did the finance team last review the potential financial impact of a supply chain disruption?

You don’t need to become a human rights expert. But you do need to ask the right questions. Because in today’s regulatory and reputational landscape, ignoring modern slavery isn’t just a moral blind spot – it’s a financial risk no CFO can afford to ignore.

Author: Matt Friedman, CEO at The Mekong Club
Photo by Mikhail Nilov