The two retailers are opposing the Accord on Fire and Building Safety, a broad agreement to improve safety in Bangladesh garment factories. Other European and American clothing retailers agreed to the accord, including PHV, which makes Calvin Klein, Tommy Hilfiger and Izod clothing.
The push for worker safety in Bangladesh follows a catastrophe at the Rana Plaza building, which collapsed on April 24 and killed more than a thousand workers. A fire at the Tazreen factory in November killed 110 workers.
The investors, who have $1.35 trillion in assets under management, wrote that companies need to know their suppliers, make sure they comply with safety standards and disclose their supply chains.
Teamsters General Secretary-Treasurer Ken Hall signed the statement on behalf of the Teamsters Affiliates Pension Plan. So did representatives of retirement funds for the UAW, AFL-CIO and state employee unions.
Here's the entire letter:
We are global investors with a combined US$1.35 trillion in assets and assets under management.
The recent and ongoing tragedies in Bangladesh’s apparel manufacturing sector, such as the Tazreen factory fire and Rana building collapse, that have resulted in a death toll of over one thousand workers, poignantly illustrate the significant reputational, operational, and legal risks that are ubiquitous in global supply chains and underscore the urgent need for companies to know their suppliers, ensure compliance with safety standards, and fully disclose their supply chains.
Improving worker safety in Bangladesh may require a collaborative effort by both companies and government. As shareholders, however, we specifically must rely on the companies in which we invest to monitor and mitigate the risks in their supply chains. We urge companies with significant purchasing power in Bangladesh – companies such as Walmart and Gap – to act swiftly and effectively. We welcome the announcement by H&M, Inditex, and others to join Phillips-VanHeusen and Tchibo in the Accord on Fire & Safety in Bangladesh and view such an agreement as an example of the crucial collaboration needed to both promote worker safety standards and protect shareholder value.
Proper risk oversight requires first that a company knows its supply chain. We expect companies in our portfolios to ensure the integrity of their supply chains. We are dismayed by public statements from any company that states it is unaware that a factory produces its products. Companies must know which factories produce their goods in order to properly manage a complex global supply chain, including being effective at monitoring safety and other compliance risks at the facilities.
Companies must also actively ensure compliance. It is not sufficient to place the onus for compliance on suppliers alone while pricing systems actively undercut requisite investment in infrastructure or encourage covert subcontracting. We expect portfolio companies to pursue cooperative relationships with suppliers that enable compliance and promote stable production.
Lastly, we urge companies to disclose their supply chains. Transparency strengthens accountability.
As investors, it is not in our interests for there to be any more tragedies.
Scott Zdrazil, Director of Corporate Governance
Amalgamated Bank LongView Funds
Brandon Rees, Acting Director
Office of Investment
American Federation of Labor-Congress of Industrial Organizations
Anne Sheehan, Director of Corporate Governance
California State Teachers’ Retirement System
Denise L. Nappier, Treasurer
Connecticut Retirement Plans and Trust Funds
Vicki Bakhshi, Director
F&C Asset Management plc
Tim Goodman, Associate Director-Head of North American Engagement
Hermes Equity Ownership Services Limited
William Atwood, Executive Director
Illinois State Board of Investment
Cllr Kieran Quinn, LAPFF Chairman
Local Authority Pension Fund Forum
Kris Douma, Head of Responsible Investment & Governance
MN
William Dempsey, Senior Vice President
The Nathan Cummings Foundation
New York City Comptroller John C. Liu on behalf of
The New York City Pension Funds
Patrick Doherty, Director of Corporate Governance
New York State Common Retirement Fund
Dr. Marcel Jeucken, Managing Director Responsible Investment
PGGM Investments
Ken Hall, General Secretary-Treasurer
International Brotherhood of Teamsters, Teamsters Affiliates Pension Plan
Francine Parker, Executive Director
UAW Retiree Medical Benefits Trust
