Calvert  News & Commentary

Calvert Investments Applauds Apparel Retailers' Commitment on Bangladesh; Calls on Other U.S. Brands to Embrace New Accord


Calvert Investments applauds the major global apparel retailers including Benetton, C&A, H&M, PVH, Inditex, Carrefour and others that joined the comprehensive Accord on Fire and Building Safety aimed at avoiding future disasters at factories in Bangladesh. The Accord reflects pressure brought to bear on the apparel industry and the government of Bangladesh by trade unions, workers’ rights groups, consumers, and responsible investors around the world following the collapse of the Rana Plaza building on April 24th with over 1,100 lives lost, most of whom were women.

Calvert calls upon Gap, J.C. Penney, Kohl’s, Target, VF Corporation, Wal-Mart, and other major U.S. retailers to join PVH in signing the Accord on Fire and Building Safety in Bangladesh and devote the resources and leadership necessary to ensure that no worker need fear for their lives in the workplace. The legal liability issues cited by the companies can and must be resolved quickly in order for the Accord to have the widest and deepest positive impact. They also need to overcome lingering concerns over working on a compulsory and collaborative basis with other companies, governments and trade unions; nothing less than a compulsory, collaborative approach will solve the problem in Bangladesh.

The workers in Rana Plaza were aware of the building’s structural defects but lacked an effective method to communicate these concerns or ability to withhold labor until repaired. The Accord focuses on improving of factory conditions using credible inspections coupled with involvement by appropriate stakeholders including retailers, trade unions, the Bangladesh government, and the International Labor Organization (ILO). Companies are also pledging significant contributions to a fund dedicated to safety upgrades in particular.

Calvert has a long-standing history of stakeholder engagement with global apparel brands calling for reliable and transparent safety auditing throughout supply chains. We strongly believe that workers must have the right to raise concerns about unsafe working conditions without worrying about retaliation. This right can best be achieved when companies and suppliers guarantee the freedom of association and the effective recognition of the right to collective bargaining, a core ILO labor standard.

The ILO has unique legitimacy and capacity in working with governments, employers and trade unions in building sustainable economies that respect fundamental rights at work. But neither the ILO nor any one company—or even entire industry—can solve these problems alone. The onus also lies on the government of Bangladesh to take the necessary steps to protect its workforce. Recent actions by the government including raising the minimum wage, closing unsafe factories, and eliminating barriers to union organization demonstrate that it has the will to act. Nonetheless, Bangladesh must continue to work with the ILO and its Better Work program to build its capacity to follow through on the Accord and its international commitments. The EU and the U.S. Government also have important supporting roles to play both as key stakeholders in the ILO and as the home country governments of most of the apparel brands manufacturing their products in Bangladesh.

Each year, over 2 million people die from work-related causes around the world at an estimated cost of $1.25 trillion. This latest tragedy is a defining moment in the history of workplace safety and worker rights. Just as the 1911 Triangle Shirtwaist Factory fire spurred the legislative framework for workplace safety in the U.S., the Rana Plaza tragedy should trigger a global safety review of apparel industry factories beyond Bangladesh—and reinforce the linkage between worker safety and worker rights that is as relevant today as it was a century ago.

Calvert will closely monitor developments in Bangladesh and continue to work together with other responsible investors, apparel brands, trade unions, and governments to set a new standard for corporate and government responsibility alike in the 21st century global apparel industry.

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