Advocating for factory worker safety

Shareholder advocacy |

Praxis asks large garment companies to help Bangladesh improve factories

In Bangladesh (the second-largest garment industry in the world, following China), the garment industry provides vital economic opportunity to the country. Unfortunately, however, the millions of garment factory employees (roughly 80 percent of whom are women) work in unacceptable and dangerous factory environments.

April 2015 marked the second anniversary of the collapse of the Rana Plaza building in Bangladesh, which killed over 1,100 garment workers and injured more than 2,500. The building housed several garment factories that manufactured clothing for many well-known international clothing brands.

Following the tragedy, investors – including Praxis Mutual Funds - pushed these companies to join the Accord for Fire and Building Safety in Bangladesh, now with about 200 member companies, as well as the Alliance for Bangladesh Worker Safety. These organizations encourage the Bangladeshi textile industry to enforce higher safety standards and pledge to support the country’s textile industry financially and by sourcing their garments in Bangladeshi factories. As part of their efforts, the two organizations made progress with inspections of factories for fire, electrical, and building structure safety.

However, Praxis Mutual Funds and other investors continue to press garment companies about their plans to help factories pay for safety upgrades. This type of financial support from manufacturers is essential for factories to cover the costs of creating safe workplaces. In order to increase safety, Praxis is also recommending that clothing brands incentivize factories to establish committees (comprised of factory workers and management) tasked with addressing occupational safety and health.

Additionally, Praxis is urging companies to donate to the Rana Plaza Donors Trust Fund for victims and their families. As of August 2015, $21 million had been raised and dispersed – only $9 million short of the trust fund’s long-term goal.

Author Everence staff


The Fund’s stewardship investing strategy could cause the fund to sell or avoid securities that may subsequently perform well, and the application of social screens may cause the fund to lag the performance of its index.