Investment for a better Bangladesh RMG Industry

Everyone agrees, to sustainably improve the RMG industry increasing investment is necessary to deliver improvements in  productivity and safety.With plenty of multi stakeholder activty on compensation and safety, there is reason to suppose that the case for more investment will grow. http://www.dhakatribune.com/2014/feb/19/when-will-value-bangladeshi-life-go              According to the Economist, buyers have strong economic arguments for investing in such initiatives to improve the RMG sector in Bangladesh  http://www.economist.com/news/business/21588393-workers-continue-die-unsafe-factories-industry-keeps-booming-bursting-seams

There is certainly still good reason to suppose that cutting and running to competitor nations will not remove risks for brands and buyers of poor standards in supply chains. One worry for Bangladeshi businesses and workers however, is that restructuring may pull the ladder for improvement away from smaller factories – even though the nature of the industry and short lead times often builds in a lot of sub-contracting. Squaring this circle is a global problem for the garment sector and one which deserves to be followed with close interest. http://www.thedailystar.net/op-ed/urgency-for-rmg-sector-restructuring-12531

One intriguing post Rana development is growing interest from investment funds in the sector. How this pans out may make a huge postive difference over the next few years  http://www.theguardian.com/sustainable-business/supply-chain-tau-investment-management-regulations-cheap-labor-clothing

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CLEAN CLOTHES CAMPAIGN RELEASE ON RANA

Not every campaign or protest works or is worth endorsing and compliance professionals can only do so much in the face of corruption and complacency – but anyone looking to express support for building a virtuous cycle against the viciousness of the race to the bottom that underlies so much misery, may wish to take a look at the Clean Clothes Campaign’s press release on Rana Plaza http://www.cleanclothes.org/media-inquiries/press-releases/stop-the-killing-act-now and could do worse than signing its petition to Tazreen brands not to cut and run’ http://www.cleanclothes.org/urgent-actions/call-upon-tazreen-brands-to-deliver-the-goods#action

Effective campaigns supported by citizens and consumers all around the world are vital to ensure that the baby reported to have been born in the rubble  of Rana Plaza grows up in a world where human life is properly valued

http://www.daily-sun.com/details_yes_26-04-2013_Baby-born-amid-death-throes_479_1_1_1_7.html

Is there financial value in ESG?

Deloitte have published a new report “Finding the Value in Environmental, Social, and Governance Performance” which reviews evidence suggesting that environmental, social, and governance (ESG) issues can result in positive benefits and better position a business to mitigate any downside risks from an ESG shock.  

By no means a  definitive answer to the perennial challenge of demonstrating value from ESG commitments  – or the conundrum that there are always companies that thrive in the face of adverse publicity – but even so a good example of the continuing mainstreaming of ESG

Corporate responsibility – from the Industrial Revolution to 2013 and beyond

Whilst some of the contemporary debate about Corporate Responsibility (CSR) may appear new to some, it is worth remembering that debates about environmental and social impacts in business are at least as old as the industrial revolution itself. Even in the 19^th century, some employers made a business case for improving the living conditions of workers and in early 20^th century Michigan, Henry Ford argued that raising wages so that the workers who made his cars could also afford to buy them was good both for his workers and his company.

Conscientious citizens have long used their influence as consumers and investors to influence the private sector.  Although boycotts can be counter-productive and are often limited in their effect, they can have huge symbolic power as Gandhi famously demonstrated.  The 1970s and 1980s campaigns against investment in apartheid South Africa and some of the Western multinationals operating there, greatly increased global public and media interest in concepts like ethical investment and corporate responsibility.

Key CSR issues and the UN Global Compact Principles

CR – the Business Case (1)

http://www.crguk.org/

http://www.csrcentre-bd.org/

Although hugely valuable and influential, ethical choices, such as choosing an ethical bank account, or buying goods certified as organic or fair trade are almost by definition always at first a minority choice.  There is also often a moral dimension – who is more useful for the good of wider society, an investor who avoids holding shares in a tobacco company because they do not want to profit from the harm inherent in the product, or the citizen who campaigns democratically for the government to discourage use by raising taxes?   (One answer by the way is that someone could be both.)

Nonetheless, even though the common interest of practitioners is to improve impacts against ESG standards across the board and to mainstream good practice, it would be short sighted to dismiss ethical/moral choices as always a niche/minority activity.  The end of 2012 and start of 2013 saw the tax debate originating in the UK spread  globally (after many years of diligent campaigning and being overlooked by much of the media except for Private Eye)

• http://www.telegraph.co.uk/news/politics/9829108/Starbucks-threatens-Cameron-after-unfair-tax-attacks.html   http://www.wired.co.uk/news/archive/2013-03/05/microsoft-danish-billion-dollar-tax-bill  http://www.taxresearch.org.uk/Blog/2013/03/02/tax-us-if-you-can-the-new-edition/)