Driving Financial Sector Innovation in the Global Strategy to End Modern Slavery
November 12, 2020
The Global Fund to End Modern Slavery (GFEMS) is pleased to share the expansion of our Global Finance portfolio to include an initiative focused on use of new payment technologies and virtual currencies by traffickers.
This initiative will evaluate new payment technologies and virtual currencies tied to online sexual exploitation of children (OSEC), determine how to identify these transactions, and develop forensic techniques for investigating the illicit financial flows to traffickers. Building on the Fund’s recent work with partners in the Philippines and the UK to identify and disrupt financial flows tied to online sexual exploitation of children (OSEC), these initiatives are designed to drive development of solutions with potential to be replicated globally.
Mobilizing the financial sector is a critical component in the Fund’s comprehensive strategy. The financial sector has tremendous potential to drive systemic change and play a key role in making modern slavery economically unprofitable.
Beginning in 2018, when GFEMS CEO Dr. Jean Baderschneider served as a commissioner on the Liechtenstein Financial Sector Commission on Modern Slavery and Human Trafficking and building off the efforts of the ensuing FAST Initiative, GFEMS has accelerated its investment in financial sector innovation and partnerships. To-date, GFEMS has committed over 1 million USD in funding to its Global Finance initiatives.
This Global Finance portfolio is strategically designed to leverage and integrate diverse funding streams, driving innovation and more effectively mobilizing the financial sector.
One component of the Fund’s financial sector strategy is leveraging the power of responsible investors to drive meaningful, sustainable actions by companies to address forced labor risks in supply chains. For companies to take meaningful action, they first need actionable insights on forced labor risks in their supply chains. However, existing forced labor risk assessment tools have largely been too qualitative or inexact to inform targeted and effective risk mitigation efforts.
To address this, GFEMS has developed an award winning forced labor screening tool that predicts the risk of forced labor at the firm level using operational features like the number of known trade partners, financial information, and geography. The Fund intends to release the prototype open source for investors, supply chain management platforms, and NGO watchdogs to further develop and integrate into their own platforms, elevating the issue of forced labor in due diligence and procurement. This effort is key to ultimately mobilizing trillions in private sector procurement and ESG investment to sustainably address forced labor.
The Fund also leverages the expertise and analytics capabilities of the financial sector to improve efforts to identify and disrupt illicit financial flows to traffickers. As part of this workstream, GFEMS kicked off the Cross Industry Data Initiative (CIDI) in early 2020. Working with The Knoble and SAS, the Initiative convenes financial crime professionals, financial institutions, law enforcement experts, and NGOs in a series of working groups to address data-sharing challenges and build partnerships necessary to implement solutions.
We look forward to sharing future updates about our growing Global Finance portfolio and partnerships. Together we can create and implement actionable solutions for ending modern slavery.