One-Year Anniversary of Tragedy at Rana Plaza in Bangladesh
On the one-year anniversary of one of the worstworkplace disasters in history, investors are reminding companies of their responsibility to address human rights abuses throughout their supply chains. An investor statement signed by 134 institutional investors representing $4.1 trillion in managed assets was released today by the Interfaith Center on Corporate Responsibility, and was covered in the Wall Street Journal.
Below is an article penned by Lauren Compere, Managing Director and Director of Shareholder Engagement at Boston Common Asset Management, addressing the role investors can play in ending these kinds of tragedies. The article first appeared in Proxy Preview 2014, a free resource that covers environmental, social, and sustainable governance shareholder proposals to help shareholders vote their values. To learn more, read our Proxy Season Updates at asyousow.org, or download Proxy Preview 2014 at proxypreview.org.
THE REAL RISKS BEHIND CHEAP CLOTHING: INVESTORS TAKE ACTION ON BANGLADESH
Managing Director and Director of Shareholder Engagement, Boston Common Asset Management
The November 2012 Tazreen garment factory fire and the April 2013 Rana Plaza building collapse in Bangladesh resulted in the deaths of over 1,500 garment workers. The pursuit of low-cost manufacturing comes at a high social price and represents a material supply chain risk to companies and investors alike. Since May 2013, Boston Common Asset Management has helped to lead an investor coalition, coordinated by the Interfaith Center on Corporate Responsibility and representing more than 200 organizations in Europe, North America, and Australia with $3.1 trillion in assets, to encourage companies to address systemic problems in the Bangladesh apparel supply chain.
The coalition issued an investor statement calling on companies to act in coalition to enact system-wide reforms that would prevent future loss of life due to unsafe working conditions. The coalition encouraged 21 companies to join the Bangladesh Accord on Building and Fire Safety (the Accord), which includes worker representation and is legally binding. Over 130 companies have joined the European-led Accord to date—including PVH Corp., one of few U.S. companies to do so. ASOS and Disney are amongst the companies that have decided to avoid sourcing from Bangladesh, and Gap, JCPenney, Target, VF Corporation (Timberland), Walmart, and others have joined the Alliance for Bangladesh Worker Safety (the Alliance), backed by North American retail associations. Li & Fung has joined the advisory board of the Accord at the request of its customers but has not joined the Accord directly. In October 2013, adidas joined the Accord after Boston Common led a dialogue with the company on behalf of the coalition.
Despite the investor coalition’s progress to date, companies must be more transparent about their sourcing practices. Companies need to begin to disclose from where they are sourcing and how they are investing in capacity building down the supply chain to the factory floor. Investors can advocate for companies to take concrete actions, such as supporting common standards for factory inspections, joining the International Labor Organization Better Work Program in Bangladesh, which addresses broader worker human rights and encouraging victim compensation by contributing to the recently established international trust fund. This proxy season, whether in constructive dialogues, investor statements, resolution filings, or annual shareholder meeting questions, every company that is part of the global apparel supply chain will be asked: “How are you applying the lessons learned from the Bangladesh tragedy into your supply chain practices?”
For more information, download Proxy Preview 2014.