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The usefulness of modern slavery disclosures: institutionalinvestor perspective

S. Bandara,A. Perera,Elizabeth Rainsbury

Published 2026 in Pacific Accounting Review

ABSTRACT

The introduction of modern slavery regulation in New Zealand was initiated in 2021 but was subsequently paused in 2024, whereas Australia, a close trading partner, has implemented such regulation. Because New Zealand institutional investors operate across borders, they are influenced by Australian modern slavery disclosures. Within this context, this study aims to examine how New Zealand institutional investors perceive the usefulness of modern slavery disclosures (MSDs) in the absence of domestic regulation, but in the presence of cross-border regulatory pressures. In this study, the authors applied a sequential mixed-method approach. Data was gathered through an online survey and semi-structured interviews with institutional investors registered in New Zealand to validate and further investigate the results. The study found that institutional investors perceive MSDs as useful for informing investment decisions. The most valued information includes disclosures on actions taken to prevent modern slavery, followed by descriptions of the structure, operations and supply chains of investee companies. Reputation emerged as the primary motivation for valuing MSDs, alongside the signalling of management quality and alignment with investors’ environmental, social and governance policies. However, while MSDs are perceived as useful, their actual use in investment decisions remains limited, largely due to challenges stemming from both investors themselves and the quality of investee disclosures. These findings suggest that, for institutional investors, MSDs signal a commitment to responsible conduct, although challenges hinder their practical use. To the best of the author’s/authors’ knowledge, this study is the first to examine the decision usefulness of modern slavery disclosures from the institutional investors’ perspective.

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