A global coalition of 134 institutional investors has renewed an appeal to apparel sector companies to use their ‘full influence’ to improve working conditions in their supply chains. In a statement designed to coincide with the one-year anniversary of the collapse of the Rana Plaza clothing factory complex in Bangladesh, which killed 1,138 people and injured many more, the investors, who manage more than $4.1 trillion in assets and are led by the US-based Interfaith Center on Corporate Responsibility, say much progress has been made since the disaster, but more remains to be done.
The statement notes that 160 companies from 20 countries have now joined the Accord for Fire and Building Safety, which has begun factory inspections and remediation efforts in 1,500 Bangladesh workplaces and is also beginning to train workers. More than 120 new trade unions have also been registered since the beginning of 2013, and common inspection standards have been adopted in Bangladesh both by the Accord and by the Alliance for Worker Safety, an initiative of North American apparel companies and retailers.
However, it says many more companies need to join the Accord and that greater efforts ought to be made by retail sector companies to strengthen local trade unions and ensure a living wage in supplier factories. There should also be more work to establish grievance mechanisms and stronger efforts to provide ‘effective remedies’ for workers and families affected by the Rana Plaza collapse. There is particular concern that corporate financial aid to Rana Plaza victims ‘is falling short of projected need’. The coalition says that of the estimated US$40 million needed to cover medical expenses and compensation for victims and their families, only $15 million has so far been pledged or collected. The statement urges retail sector companies to donate more to the overall fund, irrespective of whether they had any sourcing links to the Rana Plaza building.
Aside from issuing a public statement, investors in the coalition are sending out letters to relevant companies in which they hold equity, with some also committed to following up through direct dialogue with individual businesses. Among those to have signed the statement are Allianz Global Investors, BNP Paribas Investment Partners, Fourth Swedish National Pension Fund, and the French Public Service Additional Pension Scheme.
This coincides with a jointly hosted webinar by the Interfaith Center on Corporate Responsibility (ICCR) and the Principles for Responsible Investment (PRI) on the progress of labour standards, opportunities and challenges for companies sourcing from Bangladesh to be held on 3 June 2014.