In a letter released on Thursday, the 123 signers, including the Presbyterian Church (U.S.A.), the Unitarian Universalist Association and the A.F.L.-C.I.O., urged retail giants like Wal-Mart, Target, Sears and Gap to sign on to the factory safety plan that more than 30 European retailers embraced this week.
The Interfaith Center on Corporate Responsibility, which helped put together the letter, said the signers controlled $1.1 trillion in investment assets.
Also Thursday, a second group of investment and pension funds controlling $1.35 trillion in assets, sent a letter to retailers, calling on them to ensure compliance with safety standards in Bangladesh and to disclose all of the factories they use — a demand that most major retailers have resisted.
The 118 religious groups and investors mentioned the Rana Plaza building collapse that killed more than 1,100 workers last month as well as a fire in November in Bangladesh that killed 112 workers, saying, “They are a grave indictment of the human rights record of Bangladesh, and an illustration of the failure of the global companies that manufacture and source their products there to ensure humane working conditions.”
The signatories pointed to decisions by some American companies, like Wal-Mart and Gap, to forgo signing on to the plan and instead set up their own factory inspection programs for Bangladesh, and criticized the moves as insufficient.
“Acting alone, companies can and do bring about meaningful and positive changes in human rights in the countries where they source and manufacture,” the signers wrote. “But when faced with intransigence of the type we have historically seen in Bangladesh on worker safety issues, we are convinced that systemic change will only occur when companies take action together.”
This week, numerous European retailers, including HM, Carrefour, Tesco, El Corte Inglés and Marks Spencer, rallied behind the new factory safety plan. Under it, companies commit to having tough, independent inspections of the factories they use in Bangladesh and to help finance renovations for fire and building safety, like building fire escapes on factories lacking them.
Of the nearly 40 companies that have signed that accord, only two are based in the United States: Abercrombie Fitch and PVH, the parent company of Tommy Hilfiger and Calvin Klein.
The signers of one letter, including Boston Common Asset Management, Christian Brothers Investment Services, Domini Social Investments, Trillium Asset Management, and Wespath Investment Management, investing on behalf of the United Methodist Church, highlighted the recent factory disasters.
“As shareholders who have been engaging apparel companies and retailers to foster responsible sourcing practices, including human rights due diligence with robust audit oversight in global supply chains, we see the events in Bangladesh as a watershed moment for the industry,” the letter said. “Regardless of whether products are being sourced from Bangladesh, Guatemala, China or the Philippines, morality dictates that the price/value calculus for all manufactured goods must begin with the fundamental human rights of workers, including health and safety, freedom of association and collective bargaining and a living wage.”
The second letter, signed by the New York State Common Retirement Fund, the California State Teachers’ Retirement System and 13 other institutional investors, warned retailers of the “significant reputational, operational and legal risks that are ubiquitous in global supply chains.”
“We expect companies in our portfolios to ensure the integrity of their supply chains,” the investors wrote. “We are dismayed by public statements from any company that states it is unaware that a factory produces its products.” After the recent factory disasters in Bangladesh, documents tying Wal-Mart and Sears to production at the facilities were found, but both retailers said suppliers were using those plants without their knowledge.
Other signers included Amalgamated Bank LongView Funds, the Connecticut state retirement plans, the Illinois State Board of Investment and the International Brotherhood of Teamsters Pension Plan.
“As investors, we feel it’s important to be clear in terms of what we want to say to the companies and to workers around the globe,” said the Rev. Seamus P. Finn, representing shareholders from the Catholic organization Missionary Oblates of Mary Immaculate. “There is no ad hoc, stitch-up solution to this. It’s got to be a serious systemic approach.”
Father Finn said that if the retailers rejected these appeals, the faith groups and investors would not divest their holdings, but would instead push harder by, for example, sponsoring shareholder resolutions.
“Our general approach is we stay and fight,” he said.
Also on Thursday, Democratic Senate and House leaders sent separate letters calling for higher standards in overseas factories. Eight Democratic senators — including Harry Reid of Nevada, the majority leader; Sherrod Brown of Ohio; and Tom Harkin of Iowa — sent a letter to Wal-Mart, Kohls, Gap, the Children’s Place, J. C. Penney and several other top retailers, urging them to join the international plan for factory safety in Bangladesh.
The senators wrote, “Your companies are in a position to put an end to these tragedies by requiring your suppliers to follow transparent processes and clear, enforceable standards for worker safety and basic human rights.”
In the House, Minority Leader Nancy Pelosi of California and several others wrote to the Bangladesh prime minister, Sheikh Hasina, urging that worker safety in that country be ensured.
This article has been revised to reflect the following correction:
Correction: May 16, 2013
An earlier version of this article misstated the number of institutional investors that signed a letter concerning safety standards and disclosure among apparel companies. There were 15, not 16.
Article source: http://www.nytimes.com/2013/05/17/business/global/investors-and-religious-groups-press-retailers-on-safety.html?partner=rss&emc=rss