April 2016 marked the third anniversary of the Rana Plaza building collapse in Bangladesh that killed 1,000 garment workers. In remembrance of this tragedy, Praxis Mutual Funds® joined other investors in signing a statement drafted by the Interfaith Center on Corporate Responsibility, a national coalition of institutional investors who collaborate to engage corporations on environmental, social and governance issues. The statement pressed the companies that signed an Accord on Fire and Building Safety to do more to make sure their supplier factories are addressing issues found during inspections.
The statement calls on companies that signed the accord to commit sufficient financial resources to enable factories to fix safety issues, and for the companies to report on the nature and level of financial support. It also asks companies to use their leverage with factories to create an environment conducive for establishing effective, proactive and independent safety committees.
This recent statement follows a previous statement published shortly after the building collapse in 2013, when more than 200 global institutional investors, representing more than $3.1 trillion in assets under management, appealed to companies in the garment sector to:
- Join the Accord on Fire and Building Safety that includes signatories from trade unions, companies and nongovernmental organizations.
- Commit to paying a living wage to all workers.
- Publicly disclose all of their suppliers, including those from Bangladesh
- Ensure that appropriate grievance mechanisms and effective remedies, including compensation, are in place for workers and families affected by the Rana Plaza building collapse.
In the last three years, an unprecedented number of global brands and retailers joined the accord and collaborated to address immediate and short-term threats to worker safety in the garment sector. Although expert inspections have identified thousands of safety issues, however, the vast majority of corrective action plans are far behind schedule. The lack of speedy remediation may be partly the result of a lack of financing.