Innovative Digital and Sustainable Finance For Preventing and Addressing Modern Slavery and Human Trafficking (HLPF 2025 Side Event)

Microphone. So, dear colleagues, a warm welcome to all of you to this side event slash roundtable on unlocking the business case, sustainable and digital finance to prevent modern slavery and human trafficking. And Liechtenstein is very proud to co-sponsor this event today and as a part of the 2025 High Level Political Forum. And we'd like to thank our colleagues at UNDP and the fast team in particular, as well as extend our sincere thanks to all the panelists who've joined us today. So we're convening this event to spotlight the role of sustainable and digital finance in preventing modern slavery and human trafficking. It is, of course, aligned with Liechtenstein's longstanding engagement to prevent these crimes by also using the expertise of our own financial center. So in 2017, we launched the Finance Against Slavery and Trafficking Initiative, and it remains our, or one of our key contributions to the SDGs today. Um, our colleagues at UNDP have spearheaded the initiative, um, for exactly one year now, actually, it was just, um, at last HLPFs in this very room that we've announced the transition, and we are very pleased to see the important contribution that they have done to really implement the FASt blueprint on the ground. Throughout its latest study, FASt has deepened the understanding of the investment gap in addressing, modern slavery and human trafficking, and offers practical and actionable recommendations for leveraging innovative financial mechanisms and creating sustainable global financial systems. It is, in our view, both very timely and pertinent to discuss the crucial economic rationale for investing in anti-slavery and anti-trafficking measures through proactive engagement and alignment with sustainability standards. We must harness digital and sustainable finance to further public-private collaboration and inclusive digital ecosystems. And we also need to work towards implementing data-driven, survivor-informed and rights-based approaches to strengthen sustainable finance strategies aligned with SDG 8, which is, of course, under review at this year's HLPF. So thank you very much, and I look forward to a rich discussion today.

Shana Gear. I work at the Sustainable Finance Hub, particularly running a portfolio on SDG impact management finance tracking, where we have the pleasure to host the FAST Initiative. So you are very welcome to this session, and we are very pleased to have you here together with us. This is a very important event for us, particularly because of its connection with the High-Level Political Forum, and particularly the focus on the SDG 8, that we've been working for quite a long time with the FAST initiative. So it's a privilege for me to have you here with us at the UN headquarters to explore how we can unlock the power of sustainable finance and digital finance to help prevent modern slavery and human trafficking. So this conversation, it's not only timely, but it's urgent. And as we reflect on the progress towards the SDGs, the Sustainable Development Goals, We must confront the most persistent challenge to human dignity and sustainable development. And actually, we see modern slavery and trafficking as a development failure. So we need to address this properly. And we count on the key stakeholders that we have today in this roundtable to make sure that we can find a way to address this issue with accountability, commitment, and transparency. So each year, as you know, there is an estimate of $236 billion in illicit profits that is generated from forced labor, an alarming reminder of the scale and urgency of this problem that we are facing, still facing. So today, more than 28 million people are trapped in forced labor, 86 of whom are exploited through the different constituencies as part of the private sector. So these are not isolated incidents. They are systemic failures that cut across borders, industries and economies, undermining inclusive growth, decent work and fundamental human rights. So this year, the High Level Political Forum places a spotlight on the SDG 8, as I have already mentioned. So we are calling for inclusive and sustainable economic growth with full and productive employment and decent work for all. So within this goal, we are targeting, looking at target 8.7 that commits us to take immediate and effective measures to eradicate forced labor, modern slavery, and human trafficking, and secure the prohibition and elimination of worst forms of child labor. So yet, despite these goals, we face a persistent investment gap. And the financial resources currently allocated to address these issues fall short of what is needed. And the cost of inaction reflected in human suffering, supply chains, vulnerability, market exclusion, regulatory and reputational risks is even greater. So that's why with the vision and support of the government of Liechtenstein, the first initiative was created. And today we mark one year since UNDP Sustainable Finance Hub became the new institutional host for the Finance Against Slavery and Trafficking Initiative. And we have a very, very bold mandate to mobilize the financial sector as a force of good. So in these 12 months, we have made remarkable progress. We have strengthened partnerships across sectors, developed tools to guide responsible investment, and most recently conducted a study that is underway. That's the first global investment study, the first of this kind to map financial flows. gaps and opportunities in the global response against modern slavery and human trafficking. So this study will provide a compelling evidence base and clear roadmap for action, and it will highlight four critical themes central to unlocking the potential of finance in this fight. First, we are examining the investment gap and the cost of inaction. Mostly understanding the consequence of under investments that are not humanitarian, they are economic, reputational, and strategic. So failing to act perpetuates vulnerability, we can supply chains and undermines trust in institutions. So trust in institutions is a key issue across the globe, and it's something that we also need to address through our work and looking at how finance can really be a force for good. The second is that you present a case of a case, business case for action, and we have many interesting examples in this roundtable today. So the idea of this roundtable is to highlight the business case that are addressing this issues and how we can really look beyond. The issues that we find on modern slavery and trafficking, we understand that it's not only a moral imperative, it's a smart risk mitigation for long-term value creation, right? So we need really to think differently and address the subject in a way that is more positive and more active than reactive. So the financial institutions and business have this responsibility. and the opportunity to integrate anti-slavery measures to the operations, governance, and mostly decision-making. So we also explore how we can harness sustainable and digital finance to drive innovation and inclusion, and most importantly, to address accountability and transparency. So we aim to put human rights at the center and to address specifically modern slavery and human trafficking as a key issue that the financial sector can really address when it makes decisions, when it operates, when it develops new financial mechanisms and instruments to address this important subject. We also examined the importance of evidence-based solution and inclusive development, looking at data-driven, survivor-informed, and rights-based approaches that are essential and at the core of everything that we do under FAST. So looking at equity, accountability, and cross-sector coordination that must be embedded into financial strategies. So as we begin this discussion today, let us remember that finance is not neutral. It's a it's either it can either perpetuate exploitation or it can be a powerful force for justice and for inclusiveness. So thank you for being here and thank you for your commitment to building a future where finance works for freedom. I look forward to the discussion. So I just wanted to introduce our panel. So we are honored to join today by distinguished panel of experts and advocates who bring deep experience and bold ideas across sectors from survivors advocacy and civil society to business, technology, and finance. So let me briefly introduce them. Erin Phelps, Senior Advisor and COO of Freedom Fund. Declan Croucher, Senior Director, Advisor and Chief Commercial Officer at Verrit. Ayla Souza, Head of Marketing, North America, and Tony Cioccoloni, Yanchka, Senior Product Manager for IBM Connected Trade Platform. Sharon Prince, CEO and Founder of Grace Farms Foundation and Design for Freedom. Also, Nesrine Sheikh, founder of the Empowerment Collective, and Wadie Savage, senior director of social impact and transparency at Patagonia. We are waiting for her to arrive. She's in her flight and we hope she can reach us here inside of the UN headquarters as soon as possible. So please join me to welcome this exceptional group of speakers. We are grateful for your leadership and for insights. And so let's begin. And first of all, we'd like to thank the permanent mission of Liechtenstein for hosting us here today. And thank you, Noah, for you individually, because you are a great partner and also have helped us organize this session. So let's start. Our first speaker is Earing Phelps, Senior Advisor to the CEO at the Freedom Fund. Earing, over to you.

Can you hear me? Okay, thank you. So I'd like to start with a little bit of a story. About a year ago, deep in the Brazilian Amazon, a river community began to get a little bit nervous. They noticed that some equipment had been appearing nearby, things like tractors and excavators and materials for logging. And then the boats arrived. These were ferry boats full of people arriving near their village. They recognized all of these things as signs of a potential illegal logging operation. So the first thing they did was to reach out to a trusted network. This was an indigenous-led network that works to protect the people and livelihoods of the Amazon, as well as to conserve the rainforest. And then that network did a little bit of its own monitoring. When they were ready, they went to the authorities. They reached out to the federal police and the labor inspectorate. And together with other agencies, they co-led an investigation. And what they found through that investigation was a group of about 50 people, both adults and children, who were living in slave-like conditions. They were being forced to clear the land in the rainforest. They were living under tarps in the hot sun. And they didn't have access to clean drinking water, so they were forced to bathe and drink out of a nearby stream. And because of this investigation, all 50 of those victims were provided immediately with support. And they were also recognized legally as survivors of forced labor so they could access compensation from the Brazilian government. In addition, the people behind this operation were placed on Brazil's public dirty list, which will make it much more difficult for them to start similar operations in the future. It'll be hard for them to open bank accounts or access loans. And this network also reached out to an international NGO partner of theirs who could do some of the research and advocacy to make sure that any international companies that were profiting from this operation would face accountability. It's very unlikely that without this network's expertise and deep credibility and trust that they built, that any of this would have happened. Frontline networks like this one, they reach deep into areas where people have long been marginalized, and they play an essential role not only in supporting these communities and supporting survivors of trafficking, but also in holding companies accountable. And yet, despite the critical role these frontline organizations play, they are chronically under-resourced. And now, especially as we see large cuts to foreign aid, as well as private donors stepping back in their funding commitments, many of them are facing dwindling bank accounts. And just to give you a little bit of context, this network that I mentioned, my organization, the Freedom Fund, supports them. We are their first donor, and we provide them with about $25,000 a year. And the last I checked, they had just one other small grant. So today, one of our focuses of our conversation is the investment gap. And what I've just shared might make it sound like there just aren't resources out there for this type of community and worker-led due diligence work, when in fact, there are the resources out there. They're just being directed into other forms of due diligence. So while these frontline organizations are struggling for funding, companies are investing heavily in for-profit due diligence providers. So I'm talking about ESG providers, supply chain software, consultants. And a lot of this is in response to new legislation like mandatory human rights due diligence, which requires companies to take more proactive action to address harms in their supply chains. In fact, a new report from Swedwatch, which just came out, estimates that for every $1 that goes to organizations like that network in the Amazon, about $80 is spent on these for-profit providers. And the issue here is that we know that these for-profit due diligence providers really fail to effectively communicate, document the experiences of workers and communities. And the thing is that these frontline organizations really have the ability, because of the deep credibility they have and the trust they have in communities, to do a much better job in communicating what their experiences are. Mandatory human rights due diligence could be transformative for workers and communities, but it really requires that frontline organizations can engage meaningfully, and more than that, that they have the funding to do so. All of this work takes money and time. So doing things like documenting abuses in supply chains, it's risky, it takes a lot of staff time. Fighting cases against companies can take years, it can drain organizations' bank accounts. Frontline organizations also play a critical role in shaping grievance mechanisms, as well as fighting to ensure the victims are given their due compensation. Now, as we see corporations taking worker rights and reputations more seriously, frontline organizations are best positioned to hold them accountable, not only to hold them accountable, but also to propose meaningful, proactive solutions. All of this is not to say that there aren't companies who are taking steps to really meaningfully and directly engage with communities. And in fact, many of, I think, my co-panelists will be able to speak to some of those examples today. But what we really need is more funding to frontline organizations who can proactively engage with these accountability frameworks rather than waiting for companies to reach out when harms have already been done. If we want to transform any industry, including finance or cocoa or garments, resources must be directed to those who are closest to the harm. And in fact, we have models to do this. My organization, the Freedom Fund, is a collaborative fund. We're dedicated to ending modern slavery. And over the past decade, we've supported over 270 frontline organizations. Many of them are doing very similar work to this network in the Amazon, and about half of the organizations we've supported have been led by survivors. And over that same decade, we've also learned that these policy mechanisms are ineffective unless frontline organizations are activated and adequately funded. And while there are some other donors who have come alongside us who are supporting this work, our numbers are small. We need to mobilize more funding. To ensure that corporate accountability has real impact, communities and workers need to be in the driver's seat. And it's really this flow of resources to frontline groups that will help to prevent and stop that next logging operation in the Amazon, or perhaps even prevent those ferry boats of workers from getting there in the first place. It's this resource flow that can enable communities to determine and design their own destiny. This is the foundation for justice, and this is how we end modern slavery.

Thank you so much, Erin, for this very powerful words and mostly for bringing the perspective of resource mobilization and more importantly, how to channel this where it's needed the most, right? So it's my pleasure now to introduce Declan Croucher, a senior director at Verity. Declan will help us to understand a little bit better What are the practical tools and cross-sector lessons in electronics, renewables, and construction? So welcome, Norbert.

Excellent. Thank you. So I work for Verite, the labor rights civil society organization. Since 1995, we've been working with governments, intergovernmental organizations, workers, unions, other civil society organizations, and of course investors and the private sector to address labor issues and supply chains associated with migration. In my remarks, I'm going to talk about some of the strategies and approaches that we use or promote to prevent one specific type of forced labor or modern slavery. that is stubbornly pervasive in global supply chains today, and that's debt-bonded forced labor. You are probably aware that in many labor migration corridors, employers of workers do not pay the recruitment fees and related costs associated with recruiting foreign migrant workers in particular. So what happens is those workers end up paying inflated costs to get their jobs, they literally have to buy their jobs exposing them to debt bondage and other forced labor indicators and labor abuses. Regrettably, existing compliance approaches, industry and company policies, codes, standards, social compliance auditing protocols have largely failed to detect and prevent these abuses. There are in fact multiple examples in the public domain of both companies and sectors that even though they had no fees to workers policy in place and promoted that, they found themselves facing credible allegations that their workers had paid for their jobs and were, in fact, in debt bondage. This was due, in part, to the fact that the very same employers did not directly and upfront cover the cost of recruiting those workers. They left it to unscrupulous intermediaries to charge the workers for those jobs. When the employer doesn't pay these fees and costs, there's only one constituency that's willing to pay. The government isn't going to pay, recruitment agents aren't going to pay. The only constituency that's going to pay are the workers themselves. If they do pay, and even if they're subsequently reimbursed, they're going to have to borrow in order to finance their recruitment, because those costs are invariably inflated by these unscrupulous intermediaries, exposing the workers to debt-bonded forced labor. In our work in supply chains, it is our experience that less than 10% of employers in high-risk migration corridors proactively and directly cover these costs upfront. So it's a huge, huge issue. Implementing an employer-pays recruitment system or model is not conceptually difficult. It is contentious, however, because what it means is workers are no longer subsidizing their employers. So employers push back. It's contrary to their financial interests. However, there are easily identifiable, quantifiable, and legitimate recruitment fees and related costs associated with moving workers from one country to another that should be paid by the employers and factored into their cost of goods sold or the services that they provide in the same way as any other labour cost such as wages or materials cost. Under GAAP accounting, it's a general and administrative expense. It's a business expense that should be paid by employers. In order to facilitate this transition, there really needs to be an express and enforceable obligation on employers to pay these fees and costs upfront, because the incentive is for them to avoid. It should be enshrined in policies, contracts, legislation ideally, but it also needs to be verified. One cannot rely on policy declarations or commitments. The Verification isn't difficult or complicated. It can be incorporated into existing due diligence approaches that are used to screen or assess for forced labor. To give you a very practical example, an investor that we work with recently just asked a portfolio company of theirs that operates in a high risk migration corridor as part of a routine engagement, the extent to which it covers the costs of recruiting its migrant workers. And the answer was, oh, we don't cover these costs. They didn't even try to hide it. They just acknowledged, we don't cover those costs. That's a clear risk because the investor knows that the actual cost to recruit workers in that migration corridor, that particular migration corridor, just in the worker's country of origin, is somewhere in the range of the equivalent of $900 to $1,200. So if the employer's not paying it, Clearly, the workers are paying that at least, if not more. If an employer indicates they do pay these costs, verification is relatively straightforward. It's the number of workers recruited by pathway or agent multiplied by the average recruitment costs to recruit a single worker of that job classification. That gives you your number. None of this information is proprietary or commercially sensitive. It's very, very easy to estimate the rolled up total cost. It can even be verified by simply asking for officer and director assurances or by simply examining, and I'm speaking to people in the finance sector here. swift code or bank transfer confirmations. If I'm recruiting a thousand foreign migrant workers and I'm paying a thousand, the equivalent of a thousand US to move them from country A to country B, my accounts payable department should be able to show evidence of that money being transferred to whomever I'm paying to do that work. As increasing numbers of global companies require employer pays recruitment to be implemented in their supply chains, they're going to seek out ways to cascade financial accountability to their suppliers, contractors, and business partners to insulate themselves from reputational, trade, financial, and other risk. We're talking about leveraging sustainable finance tools. One particular approach that we have seen interest in and that we've begun exploring is if it's possible to use a form of commercial surety bonding to underwrite specific employer recruitment related obligations that are designed to protect workers in supply chains. We've got Sharon from the Grace Farms Foundation here, but contract surety bonds are commonplace in the global construction industry. Bid performance payment bonds, where it gives the owner assurance that the bonded entity can meet its price schedule obligations, but also can pay its workers, subcontractors, and even material suppliers. Commercial surety bonds, then, outside of non-construction type of activities, are also relatively commonplace. And in fact, there are case studies that are adjacent to migration and labor issues. Here in the United States, for example, you've got the H-2A farm labor contractor bonds, where a farm labor contractor has to post a bond to cover its obligations to guest workers. In certain countries in Southeast Asia, Malaysia and Singapore come to mind, government agencies require employers who seek to recruit foreign migrant workers to post a security bond covering their liability in the event that those workers abscond or violate the terms of their guest worker programs. So the idea that we're proposing is to create a hybrid type surety bond focused on ethical recruitment of workers in supply chains. is one in which the surety ensures-- the surety will be a large insurer-- ensures that the brand, the buyer, the employer meets its obligations to pay these fees and costs upfront that are incurred to recruit foreign migrant workers. If that doesn't happen and workers end up paying, the brand or buyer can call the bond to ensure that the employer remedies the violation and ensures that workers receive adequate remedy. So they are repaid. The surety coverage mitigates the time, cost, and aggravation associated with remediation, which can be contentious. We have people in the room here who, like ourselves, have been involved in these remediation programs. They can drag on quite literally for years before workers see remedy. And in closing, it can also contribute to the development of, you know, a market for ethical recruitment in global supply chains in high risk sectors. This has the potential to benefit a sizable portion of the estimated 170 million migrant workers toiling in global supply chains today. If there is interest in this concept, we at Verite would be happy to share our research, our learnings, and collaborate. And with that, thank you.

Thank you so much. And this is a very timely and important point that you brought to this table. And particularly for us, we are looking at these innovative solutions that can really help us to tackle the issues related to modern slavery, human trafficking, and forced labor, most importantly. So thank you so much for your inputs and for this very actionable insights that we look forward to discuss this further with you. So our next speaker is Idalia Sosa. Am I pronouncing your name correctly? Not sure. Head of marketing of Tony's Chocolonely USA. She will talk about how this mission, the mission of Tony's Chocolonely is to take chocolate 100% exploitation free. and how it supports the brand integrity, risk mitigation, and alignment with sustainability standards. So over to you.

Thank you so much for having me. I'm the head of marketing indeed for North America. And today I'm here to tell you guys a story about our brand, to really present our business case to you guys. And I wanted to present it twofold. One side looking very much at our supply chain and the work that we're doing there, but the other side also shining a light on the consumer, the consumer expectation in terms of brand reputation and what the brands represent for them. So I don't know if you guys are familiar with the cocoa industry, but right now there's a lot of expedition in the cocoa industry. It's the problem really that we face is that it's an industry that is plagued by deforestation, poverty, forced labor, and child labor. So at Tony's, we exist to change that. We say that we are an impact company that sells chocolate and not the other way around. We live and breathe this. The company was really incepted by a journalist that was working on a story around forced labor and child labor in West Africa. He went there, he was on the ground, he saw it firsthand, so then he went back home for the show and he started speaking to a few people from big chocolate companies and he's like, "Hey, I'm seeing this in your supply chain, what are you guys doing about it?" The issue with cocoa is that a lot of farmers work with one middleman. That middleman then sells cocoa beans to the big chocolate companies. The answer he was getting is that we have transparency up until this point. So we are accountable up until this point. And he was like, OK, I'm not going to take enough with that answer. I'm going to prove to you guys that it can be done in a different way. So he said. up and started his own brand, Tony's Choco Lonely. The brand name is Choco Lonely, so it because it represents the lonely journey that he had in the cocoa industry as he was trying to solve this problem. Fast forward 20 years, today we are still very much, we breathe and live our mission. We have a three-step approach in our journey, in our roadmap. One is to raise awareness. In our brand, in our marketing, and in everything that we do, to, we make sure that we're screaming at top of our lungs the issues in the cocoa industry to really like bring people aboard with us because a lot of people, chocolate is something that people enjoy at a very high frequency, but people just don't know about these issues. So we made it a point to really communicate that. Second, we have lead by example. So for us, it was very much, very important to show that it can be done because it, and can be done at scale? Because that's the feedback that we get. Yeah, that's cute, but can you do it at scale? And three is really inspire others to act. So as part of the inspiring others to act, we created a sourcing solution. It's called Tony's Open Chain. Tony's Open Chain works with five key sourcing principles, and it's traceable beans, paying a higher price, Long term partnerships with co-ops and farmers that we work with and buy beans from. It's really working with co-ops to develop stronger farmers and it's to focus on the quality and the productivity of these farmers. So this source and solution, we in this moment, we're leveraging it for other brands to use as well. We always say that we want to collaborate in the supply chain and we'll compete on the shelf. That's fine. So we've had a few big partners that have joined us. One is Feastables, which is a very big chocolate brand. And They haven't been around for that long, but it's founded by Mr. Beast. They're growing very fast, but he's also very passionate about providing a solution in this issue. The other one is Ben and Jerry's, also committed to sourcing their cocoa beans through us. So these are, and in Europe, we have 18 other partners as well that I'm the names are mostly known in Europe, but these are all partners that have committed together with us to bring change in the cocoa industry and really change the industry from within. And then when we speak about competing on the shelf, I think we then go into, okay, what's the success story from a financial perspective for Tony's? And when we look at the past five years, I've been with the company for five and a half years, when I joined in the US, we were like doing $9 million. This year, we're going to close the US alone with $80 million. That is a lot of chocolate that we're selling. That is a lot of cocoa beans that we are sourcing. And we, the company, company-wide, from a global perspective, we have been growing at a rate of 25% year over year for the last five years, and the US growth has been far more. It has been far faster than that. Last year we launched at Walmart, we launched at Kroger, Albertson. This year, we just launched at Costco. Those are all big milestones for brands to achieve. And all of this, we do it while staying very close to our mission and staying very close to our consumer. We see that the consumer really resonates with the solution that we're presenting. They buy the product, they like the product, they return and stay for the mission. We think that consumers have a different perspective right now where where they spend their dollars, they want it to be meaningful. And we see that not only at Whole Foods, we also see it at Walmart. So it's like the mass shopper, the mindset has has changed and we're really like staying close to them and making sure that we are making that. that change. And besides that, we make sure that we are communicating everything we're doing to them. So I'll give an example. We have our annual fair report. It's a report where we communicate financial and non-financial KPIs. And that's where the non-financial KPI part for us is very important. This is where we communicate the amount of cases of child labor that we found in our supply chain, and we communicate the numbers of child labor cases that we have managed to remediate. This not only gives full transparency to not only our consumer, our partners, and our retailers, but it also, we are also holding ourselves accountable to present a solution when it comes to this. So, and this is something that everyone within our network has come to expect from us, and we want to keep living by that. So, I want to go back to what you said about really proactive action. As a brand, that's what we are. That's what we stand for, really proactive action to change an industry, joining forces with other brands to help us achieve that. And while we have people on our team that also lobby for legislation to really pass legislation from a government level to hold companies accountable for their supply chain, While we are in the process of that, we will continue to do our thing and really keep going with that proactive action and deliver for not only for our partners, for our community, for the community in West Africa, and our consumers. And I brought some chocolate, so please try it, and I hope you love it.

Thank you so much. We are very happy that you brought the chocolate here. We are a fan of the chocolate already. But thank you so much for your inspiring words and mostly for showing how a social purpose can really drive value and impact. So thank you for sharing this with us. So our next speaker is Janka Regan, Principal Product Manager at IBM. So you bring your perspective on IBM software and leading fintech partnerships. So we look forward to hearing your inputs on digital tools like AI, blockchain, digital identity, and how it can drive transparency and accountability in financial systems. So welcome. Over to you.

Thank you very much for having me today. So I'm honored to be here at UN supporting the FAST initiative and discuss about how digital tools, including AI, cloud, and fintechs that can be leveraged to drive innovation, detect abuse, and even help grant access to financial services for the impacted communities, as well as the survivors, and even providing better financing terms to the corporations that adhere to the labor standards. So sustainable finance is an important topic to me, both personally and professionally. Growing up in Mongolia, sustainable living and protecting the environment have been instilled in me. And moving to the United States and starting my career in the financial services industry, covering products spanning from bonds, equities, and to complex derivatives instruments at the global-- to global banks, JPMorgan Chase and Goldman Sachs, and I've been searching for this, you know, financial suite of financial instruments that can, that intersect with our, you know, day-to-day life and be, have, can have a huge impact on the local community and as well as and even getting affected by the macro and geopolitical events. And I think that suite of products are trade and supply chain finance, which can have a major role in defining sustainable finance and even be able to harness various digital tools to prevent and aid into ending modern slavery and forced labor. So I recently changed changed my industry into technology. And so I'm currently at IBM. I lead a portfolio of trade and supply chain finance solutions as part of our connected trade platform offering, which is powered by IBM's AI and leading trade fintechs running on IBM's cloud for financial services. So we have built the framework for the financial services industry with the industry leaders as part of our cloud console to reduce their digital supply chain risks as well as accelerating adoption of innovation. So as part of our portfolio, we have three pillars that we focus on. First is trade and supply chain finance digitization. Second is trade risk and compliance. And third is trade automation. So I think the second pillar, trade risk and compliance, is applicable to this discussion. So we work with various fintechs in this space. who leverage AI and big data to help financial services to proactively mitigate risk and meet various global regulatory and compliance regulatory requirements, particularly around gaining control around their forced labor risks in their supply chain. So two of the FinTechs that we work with called, for example, Trademo and Traffic Hub, which can identify and map entities linked to forced labor under various regulations, such as the Uber Forced Labor Prevention Act, withhold release orders, and so on. So they can even analyze products, specific supply chains and flag goods that can be produced by forced labor or linked to forced labor, enabling targeted risk mitigation opportunities for the financial services companies. So I think it is really key for the financial services industry and the banks to adapt FinTechs such as Trademo and Traffic Hub into their trade compliance processes and to be able to flag trade finance transactions with entities that are potentially using products made by the forced labor in their supply chain. So in general, at IBM, we recognize businesses are more and more choosing vendors and partners based on their sustainability efforts. So there are increasing, you know, number of countries that are making emissions reporting mandatory, particularly EMEA and APAC regions. So, you know, the cloud is pretty much a foundation of all these different vendors and services that eventually be used by various different corporations and to the end customers. So we recently launched IBM Cloud for Carbon Calculator, which delivers insights on carbon emissions across various types of workloads and identify hotspots and so on, and reduce eventually the greenhouse gas emissions. And these kind of reporting can be integrated to various different ESG tools. that financial services can leverage to identify some good corporations. So in summary, we can harness these digital tools such as AI, cloud, and fintechs in many ways to detect potential forced labor and increase visibility into supply chain for financial services industry. which can leverage products like trade and supply chain finance that I mentioned earlier, to be able to promote transparency and provide access to companies with better financing terms if they demonstrate an adherence to labor standards. So if you're interested in any of our solutions, I'm very happy to discuss with you after the conference.

Thank you so much. Very interesting. And of course, we want to know much more about all the cases that we are discussing here today. Thank you for bringing this into our attention and particularly for showcasing how digital innovation can really increase visibility and transparency in supply chains. This is quite a critical issue that we see across the globe. So that's quite exciting to hear this from you. So I'm delighted to introduce Sharon Prince, CEO and founder of Grace Farms, a foundation. She's a visionary behind the design of the Freedom Initiative. She's a long partner of FAST, so we are very happy to have you here and to hear your exciting inputs related to ethical and sustainability. Over to you. Terrific.

Good afternoon. It is really wonderful to be here with so many partners, actually, in terms of Design for Freedom and Grace Farms, almost all of you, and eager to spend more time with you at IBM as well. So I founded Grace Farms, which is a cultural and humanitarian center located in New Canaan, Connecticut. We're on 80 acres of preserved space. It's a hopeful space. And we are partly, part of the opportunity there is to address among the most pressing humanitarian issues of our time, including modern slavery and human rights abuses. So our work through leading the Design for Freedom movement focuses on one of the most overlooked areas of exploitation in the global economy, the building materials supply chain. So while the construction sector is addressing environmental sustainability, it has been given a fair labor transparency pass on the colossal building material supply chain. You can think of it right now, like where do all these building materials come from? Where's this desk? The building materials are really getting this supply chain transparency pass. The central question we ask is, are our buildings ethically sourced as well as sustainably designed? Today, it is nearly impossible to claim that a construction project is free of forced and child labor because the vast global supply chain behind global these building materials is opaque, fragmented, and largely unchecked for worker exploitation. Forced labor is embedded at the very beginning of the construction process in the extraction and production of materials like steel, timber that you discussed over here as well, copper, concrete, solar panels. Addressing job site labor is only half of the equation. About 40% to 50% of a project cost is in the materials. Grace Farms is playing a key convening role across sectors, including the financial sector, partnering with those with lived experience, like my fellow panelists, an incredible, incredible advocate, and also one where we actually have your empowerment collective pieces, beautiful pieces at Grace Farms, as well as Tony's Choco-Lolly. I just want to mention that we've had for the last 10, really, since almost 10 years since we opened, we've been offering design for Tony's Choco-Lolly, and we have about 100,000 visitors a year. So it affords, like, when we all work together, it really does afford expansive understanding awareness. So just as food and fashion industries were called to count shelter, our third human essential must now be next. Our relationship with FAST does go back more than eight years, and in many ways, FAST was created at Grace Farms. We partnered with the UN University and the Permanent Commission from Liechtenstein to co-host a convening to disrupt ties to human trafficking within the financial sector, which led to the proposal of 25 specific recommendations that were published in a UNU workshop report. The work followed a convening and report, Fighting Human Trafficking in Conflict: 10 Ideas for Action by the United Nations Security Council. This is leading to the passage of the UN Security Council Resolution 2331. Both were co-hosted at Grace Farms and with a multi-sectoral approach. So think about this, as conflict increases globally, hundreds of billions of dollars will be spent on reconstruction. We have a choice, either we finance and rebuild with transparency and legality or brutal exploitation will accelerate. The uncomfortable truth is that modern slavery is sustained and even exacerbated by our existing financial systems. There's currently no agreement of decision critical human rights metrics for the investment sector. It is therefore often difficult for investors to introduce and monitor human rights measures and impact. Even so, most construction projects are financed in some manner, creating a tremendous opportunity for the financial sector to de-risk exploitation. normalize fair labor inputs, and accelerate innovation at the same time. The financial sector, particularly sustainable and digital financing, holds a unique position of influence to determine which projects are financed. The use of big data and other innovative technologies can drive fair labor inputs, which we demonstrate in our interoperability chart aligning with the phases of a construction project. So there's information out there. When speaking with industry leaders about sourcing ethically, they often ask, will this cost me more or delay my project? My question is, are you okay with accepting the slavery discount? Because right now, the exploitation of workers is effectively subsidizing our returns on investment. The scale is staggering. Global, Forced labor is estimated to generate $63 billion annually by exploiting 28 million people. Construction, worth $13 trillion annually, is the largest consumer of raw materials. The global construction market was valued at $1.32 trillion in 2023 and is expected to grow to $1.73 trillion by 2030. That scale is our greatest challenge, and it's also our greatest opportunity to shift the marketplace. So the Design for Freedom movement is organized around three principles. Find and address embedded forced labor. We need to know where your materials come from and how they're made. We need to pursue ethical decarbonization, align sustainability with human rights so that we're not trading one form of harm for another. And three, to prioritize circularity, shorten supply chains, which reduces the risk of exploitation at the extractives. Our Design for Freedom report was issued in 2020, identified a dozen building materials at high risk for forced labor, including steel, copper, timber, solar panels, concrete, rubber, textiles, and electronics. Many of these materials come from remote regions with weak protections and corruption, where workers have little voice in their labor conditions. Our new Design for Freedom International guidance and toolkit is out there digitally, but it's also right here. And this brought together many experts within the materials supply chain, and it's also soon to be released in Vietnamese, offering practical tools aligned with the UN guiding principles and OECD frameworks. Our Design for Freedom working group includes nearly 100 leaders across the ecosystem of the built environment. We've launched pilot projects with burgeoning teams, owners, architects, construction firms, activating work to address embedded labor risks from the demand and the supply side, including large scale suppliers like ASSA ABLOY and Shaw Floors. Two ongoing project examples are the University of Virginia's Karsch School of Democracy to the bridge, which is a 1 million square foot project in New Delhi. This is where the financial sector can step in, apply new data and tech to projects in real time. We've also partnered with ACE Lab to integrate design for freedom principles into the AI powered materials hub, helping architects prioritize not only delivery, sustainability, but also human rights requirements in procurement. AI is being trained on real project data from leaders within our working group, SHOP, BIG, that's BRK Ingles Group, and Bloomberg to create an industry-specific ethical framework. So we advise investors to require fair labor audits on high-risk materials. You can only really handle a few of the major materials at a time. There's thousands of materials. And so we also do that, we also ask that the owner's project requirements, the OPRs, include ethical labor standards. Product certifications like FSC and PEFC would just add a core labor, fair labor requirements to their environmental chain of custody audits, thus providing a double benefit to the increase in pricing to owners. So you can see like this, our tea has FSC, like the paper and also new mass timber to ethically decarbonize too as well. Embracing circularity in construction reduces environmental and worker exploitation risk directly. Construction is responsible for 50% of global resource extraction, 40% of solid waste, and 37% of global carbon emissions. It needs to be examined, right? By identifying and reusing existing building materials, we cut emissions and protect labor rights. Some building materials, like interior textiles overlap with sectors where transparency has already advanced in the garment industry. So now, our Grace Farms Tea and Coffee, again, we want to demonstrate what we're advocating for, is a B Corp and is the only premium tea brand in the U.S. certified by Fair Trade International, donating 100% of profits to support Design for Freedom. So we're getting a double benefit, too, to create awareness not only in the beverage supply chain, but also construction. And we are now distributing, which we're excited about too, in Whole Foods, 26 of them, and we serve corporate partners like Google and JP Morgan. With more profits, we can invest in more research. We seeded a Design for Freedom project with Stanford University to scientifically determine labor's fingerprint in concrete. It is so incredible. And that also spans many of the university, the colleges within Stanford. So again, we're expanding the awareness, but also capacity. Construction has thin margins and is one of the least modernized sectors in which innovation continues to be stymied. When you drive costs lower without examining materials, you raise the risk of human cost and limit innovation. So take one example, solar panels. When prices are artificially depressed through exploitive labor, market incentives for research and development disappear. To wrap up, every building tells a story of humanity, either of dignity or exploitation. By incorporating ethical labor standards into investment decisions, necessarily using big data and circularity, we can ensure that every building, every material, and every project reflects the dignity of workers. Like lawyers, you can and must ensure legal and ethical compliance and reduce risk for the projects you are underwriting and financing. The financial industry is critical in creating a more ethical, sustainable, and even innovative future. So let's stop accepting the slavery discount. Let's create a future where the buildings we tell tell a story of dignity instead of exploitation. Thank you.

Thank you so much. The whole new sector. Yes, indeed. Very exciting to hear these innovations, and particularly to understand that design can be really a force for innovation and for freedom. So thank you so much for sharing this experience with us. So now we are honored to hear from Nasrin Sheikh, a globally recognized advocate for human rights and a founder of the Empowerment Collective and Local Women's Handicrafts. So Nasrin champions survivor-led solutions, economic empowerment, and supply chain transparency. So over to you. You're welcome.

Thank you. Thank you, everyone, for being here today. And it's an honor to work with Freedom Fund. We were one of the recipients of Survivor Leadership Fund and extremely grateful to work with Sharon Prince and Design for Freedom. It's such an honor to be here. And what I would like to really talk about is a little bit about my own story, that I was born in a very, very remote village that still today does not appear on a Google map. I had no birth certificate, no ID, no legal name, and when I was forced into a sweatshop as a child, I had no way to file a complaint or recovery of my stolen wages. I was completely invisible to that system. And as you all know and well-educated people here, that this is not just my story, this is the story of over 50 million people. And so I feel like one of the that I was thinking about to talk about is the financial innovations that can really help close the gap, and what are the things that we can really do. And I think it's more about the moral intention at the core, you know, and the commitment, and how, like, we document every hand, every product, making laborers visible and protected through traceable, transparent contracts. Brand must invest this infrastructures, not only to comply with future regulation to lead with integrity. Also, I think that millions of people are remaining undocumented and, uh, excluded from the financial systems. So how about we bring biometrical linked digital IDs that pair with the mobile accessible bank accounts that can grant laborers legal and financial identity, enabling them fair contracts, wage protections, and access to the true freedom they deserve. Also, financials, survivor-led microfinance and business explorations. because many of the survivor-led businesses and education programs don't just work, they're actually protecting the most vulnerable communities and business communities that is actually every single day is dying. And also, they are not just a charity projects. They are real, they are scalable solutions, and investing directly in them is not just Actually, just it's right, but it's very smart thing to do. Also, I would say that modern slavery is no longer hidden, and it is a mirror. And coming as a survivor, I feel like I'm holding that mirror on the faces of every CEOs, investors, and government leaders. And so what we used to think that we don't know, that quote is over now. And SDG 8, target 8.7, call for decent work for all to end forced labor, modern slavery, and child labor. To achieve this, we must transform the global economic systems, integrating the secure, transparent technology that link every supply chain, transaction, labor, and raw materials to digital contracts and accounts backed by the biometric ID. And I speak from the experience. I was undocumented in the country I was born in. It took me years, almost 11 years, to get just my ID. And even then, it was riddled with errors. Without documentation, I could not open a bank account or sign a labor contract or prove abuse that this person has, you know, because everything was done in cash based on verbal agreements and made to a nameless person who also legally did not exist in the system. So a simple app that links to the biometric identity to bank account and verifies labor contracts could build a global economy based on transparency. It could protect corporations to end modern slavery and human trafficking risk in their supply chains and protect every laborer, including those denied recognitions in their own countries. The infrastructures is already exist, but many companies avoid using it because it threatens their profit margins. That is the real core issue. The current model exploits the poorest people on the earth to produce goods for a fraction of what they are sold in the wealthier nations. But this model won't survive the coming wave of conscious consumption. The future is actually going to be built and the indigenous belief systems of fair exchange, transparency, and sustainable local economies. Supply chain labeling will not only be optional, and consumer demands for ethical and traceable products are going to grow strong every day. And if we are serious about meeting the SDG targets, we must embrace real economic transformation aligned with survivor-led solutions and support the rise of a global market where transparency and human dignity are the foundation and not the exceptions. Thank you so much for having me here. And I just feel like one of the more things that I would like to talk about is that when we consume unconsciously, we enslave not only the people, but we also degrade the earth. And circular leadership, that is something that we are working on our survivor leadership programs. And it's the idea of letting of hierarchy and building the balance of equality, of making sure that the decision is based on the circular leadership, on the base of the biggest problem that we are facing. With Empowerment Collective, we have so far empowered 5,070 women. And coming from where I come from, and if I'm here and if I'm speaking, I want to encourage all of you because of the work you all are doing on the ground, and we want to see more survivors in this position in this space to lead, and this is the time for to listen also, because so many times these ground leaders has been listening to you, and this is the time for us to take these projects and help us scale. As I talked earlier, that this is not about charity. Our programs are scalable. They can help protect the world. And people, like right now, the consumers are really becoming aware. If you look at the fashion industry, how they have actually revolutionized and brought a lot of fashion revolutions, transparency index. These are the perfect example that it's going to come into building materials, it's going to come into our IT, and all different sectors. It's going to understand that how much slavery is embedded in our economic systems. And these are on the back of the poor, the most vulnerable, the most undocumented people. And that tainted economic system that bloods and sweat and tears. That's not what we want for our future generation. What we want is the fair exchange, and that's where I would like to keep the point on. Thank you.

Thank you so much, Ms. Alirezaei. It's a deeply moving experience that you have just shared with us and thank you for sharing it here. It's very inspiring to hear all the points that you brought, coming from digital IDs, biometrics, but also looking on financial inclusion and most importantly, how transparency and scalable solutions are needed, right? and all the support that you are providing to the local communities in order to address these issues that are posed by the economic system. But you also pointed to the ways to transform the economic system. So thank you so much for sharing this with us. Unfortunately, we don't have, one of our guests was not able to reach New York. She was coming from California. So unfortunately, we will not have our next speakers that is Wendy Savage. So let's look forward to have her in our next panel. So I'll open the floor to a statement. We have Maximo Parrino from the Human Social Care Foundation for you to deliver your remarks. Thank you for coming and thank you for being here with us. Over to you.

In English, it's just hello and good afternoon. I am Italian, but I will speak in English because I think that nobody here speak Italian. Don't worry about that. Nobody's perfect. So the Human Social Care Foundation that I'm representing today is a UN ECOSOC accredited NGO, is dedicated to advancing the 2030 agenda, aligned with the 2025 high-level political forums theme of sustainable, inclusive, and evidence-based solutions for the sustainable development goals. This organization is focused on the SDG 3, 5, 8, 14, and 17, and they are doing great efforts to promote the achievement of these goals. And here, they write me the recommendation about and say, the SDG 3, invest in scalable health care infrastructure, especially for rural and marginalized populations to ensure equitable access instead of making it highly commercialized. SDG 5, enforce global policies to close gender gaps in education, employment, and leadership roles. Serious action required against weapon in digital media and hatred against vulnera- vulnerabilities, especially from South Asian country. SDG 8 found green job initiative to promote sustainable economic inclusion. SDG 14, strengthening global marine conservation frameworks like a BBNY agreement, involves enhancing international policies to protect marine biodiversity, ensuring sustainable use of oceans, and promoting global cooperation. SDG 17, we urge inclusive, locally rooted, multi-stakeholder partnership, direct funding for grassroot NGOs, South-South cooperation, tech transfer, and youth and indigenous engagement. Transparent public-private cooperation, the centralized SDG accelerator, and a global data sharing platform will enhance impact, equity, and accountability in SDG implementation. The last statement that I'm going to do, I'm representing the United for Human Rights, that next week we will have a summit, the 19th summit of the human rights for two days here at the UN. And I wanted to say that one, the United Nation holds one of the most powerful tool for fostering peace. the foundation upon which prosperity in any nation can be built, which is the Universal Declaration of Human Rights. For this reason, we urge the United Nations to encourage all member states to incorporate the Universal Declaration of Human Rights into their national constitutions and integrate its principles into school curricula at every level. Educating future generation in the values of dignity, tolerance, and mutual respect is essential to shaping a world where the rights of each individual are upheld by the shared responsibility of whole. Rights can only endure when they are exercised with respect for the rights of others. On that note, some years ago, we did a survey international, and we find out that 95% of the people don't know what the human rights are. So here we talk about human rights, but people don't know what the human rights are. So they are not educated. So the United for Human Rights, that next week we will have this summit here at the UN for two days, 24th and 25th, is promoting the human rights, teaching the Declaration of Human Rights, with a curriculum that we distribute for free in 18 languages all over the world. So any educator in the world can order the material and teach the human rights in their own classroom. So that is going to create a new generation of people that really understand the human rights and build respect and kindness. So that's very simple. Education, we talk about education all the time, and then we discover that people are not educated. Very simple. And I wanted to conclude with a quote, because I am also the president of the El Ronabba Foundation, and Ronabba was promoting the human rights with this quote. "Human rights must be made a fact, not just an idealistic dream. Thank you very much.

In the interest of time, we are just 2:30 right now, so we will not be able to open for questions, but I'd like to, most of all, to Make sure that if you have any questions, you can leave with us. We can lay back to the speakers. If you have anyone, we'll be happy, of course, to make a follow up with you. So if you can leave your question with an e-mail, we can send it to you and we can also share with the panelists. An apology for being late in terms of not having space for this Q&A. But I'm really happy to have you here. Every time that I hear all these interesting stories, we can see hope, and there are ways for us to address these critical issues that we are facing these days. So just as we close, let us not forget that modern slavery is in particular forced labor generates an estimate of $236 billion in illicit profits every year. It's a stark call to action for all of us. And particularly, not only for the UN, but also for our partners, we are here to support and to discuss and to move forward and to transform this conversation into a call to action. and mostly as an opportunity for us to solve and address these issues with transparency and accountability. So on behalf of the organizers, I extend my deepest appreciation to the permanent representation of Liechtenstein for hosting us, to our outstanding panelists and for their insights and for their leadership. And now all of you that came here today to participate in this roundtable, rest assured that we keep engaged and committed to advancing financial transparency and accountability. Thank you so much for coming.