With Work Remaining and Covid19 Still Raging, Investors Caution Against Allowing the Bangladesh Accord for Fire and Building Safety to Expire
Statement endorsed by 181 investors cites the Accord as a highly effective and critical accountability mechanism to safeguards worker health and safety that must be preserved.
NEW YORK, NY, THURSDAY, APRIL 22, 2021 – A statement endorsed by 181 global institutional investors representing over $4 trillion USD in assets under management calling on companies to re-commit to the Bangladesh Accord on Fire and Building Safety (the Accord) was released today in advance of the eight-year anniversary of the collapse of Rana Plaza.
As the Accord is currently set to expire on May 31st, 2021, investors say a new agreement between global unions and brands that includes the essential elements of the Accord must be in place beforehand or there will be no enforcement mechanism to ensure the proper functioning of the RMG Sustainability Council and no independent organization to report on its performance.
Specifically, the investors, which hold many of the global brands sourcing in Bangladesh as portfolio companies, are urging brands to endorse a new, legally binding agreement with global unions that preserves the essence of the Accord by:
- Including enforceable obligations for brands that ensure worker health and safety is protected;
- Maintaining the role of the Accord secretariat as an independent mechanism of accountability for the RMG Sustainability Council, and is;
- International in scope, providing a framework to expand the Accord’s lifesaving inspection and remediation program to other countries where garment workers’ lives are at risk from fires and structural failures.
"After the tragic collapse of the Rana Plaza building eight years ago and the death and injury of 4,000 workers, an unprecedented 200 global companies signed the legally binding Accord on Fire and Building Safety in the hopes of transforming the Bangladesh garment sector," said David Schilling, Senior Program Director for Human Rights at ICCR. “That goal is being realized, and we commend these companies, particularly those that assumed leadership in the Steering Committee alongside global trade unions, for taking that important step. Now is not the time for them to abandon this proven model for effective supply chain management. We urge companies that have been part of the Accord - and those that have yet to participate - to demonstrate leadership by committing to this agreement, not just for Bangladesh, but for all the countries where workers’ health, safety and livelihoods are put in jeopardy simply by going to work each day."
The investors point to the many achievements of the Accord, a first-of-its-kind multi-stakeholder initiative including brands, retailers, unions, and non-governmental organizations as signatories. Over the past eight years, the Accord has conducted sector-wide inspections and remediated electrical and structural problems at over 1,600 factories in Bangladesh. The Accord required brands to provide their suppliers with commercial terms or alternative means of financing to maintain safe workplaces and to make the necessary changes to remediate safety issues found through these inspections. These actions, among many others, have established the Accord’s reputation with workers and a broad range of national and international stakeholders as an inclusive, credible, and fit-for-purpose process that can transform worker health and safety in the Bangladesh garment sector and beyond.
"The Bangladesh Accord has made significant improvements in fire and building safety for over 2 million garment workers in factories in Bangladesh," said Arthur van Mansvelt, Senior Engagement Specialist at Achmea Investment Management. "The success of the agreement is largely due to the legally binding nature of the agreement, that makes it stand out from many other sustainability initiatives in the industry. As investors who continually assess human rights risks in our portfolio companies, we have confidence in the Accord model and want to see it expand to other countries as the global garment sector looks to 'build back better".
Directly following the collapse of Rana Plaza where 1,134 workers lost their lives and 2,600 more were injured, the Interfaith Center on Corporate Responsibility (ICCR) formed the Bangladesh Investor Initiative – currently comprising 250 institutional investors with over $4.5 trillion in assets under management – to press global companies sourcing in Bangladesh to become directly involved in helping to transform the Bangladesh apparel sector by joining the Accord. In the eight years since, this group of investors has supported the Accord’s work to create workplaces that both protect and respect the lives of workers, and mitigate the risks to companies and their investors.
“Throughout its existence, the Accord has contributed to making the textile industry in Bangladesh safer, and maintained a high level of transparency about factory inspections and corrective actions,” said Katarina Hammar, Head of Active Ownership of Nordea Asset Management. "As investors committed to assessing human rights risks in our portfolios, this transparency is absolutely central. The Accord has more than proven its value in terms of helping to safeguard frontline apparel workers and this has given investors a sense of confidence that risks to brands sourcing there is being managed and mitigated."
“Garment workers have been made more vulnerable during the COVID-19 pandemic as millions of workers have lost their jobs and been exposed to the virus," said Lauren Compere, Managing Director/Director of Shareowner Engagement at Boston Common Asset Management. "As Bangladesh goes into another lockdown, it is all the more important for investors, as part of their human rights due diligence, to press companies to build upon the success of the Accord and ensure the health and safety of workers during this precarious time."
About the Interfaith Center on Corporate Responsibility (ICCR)
Currently celebrating its 50th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-plus member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $US 2 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.