U.S. Retailers to Create Fire and Safety Plan for Bangladesh Factories - CSR Minute for June 4, 2013

Jun 4, 2013 7:00 AM ET
Press Release

Weeks after the collapse of a Bangladeshi apparel factory that killed over 1,000 workers, the debate continues over the responsibility of the global manufacturers who buy $20 billion worth of goods annually from that country’s clothing industry.

The latest turn in the story is that U.S. retailers have announced their plan to “develop and implement a new program to improve fire and safety regulations in the garment factories of Bangladesh,” according to the Bipartisan Policy Center, the coordinating agency. Major retailers who have signed on include Walmart, JCPenney, Target, Sears, and Gap. Also joining up are the National Retail Federation, the American Apparel and Footwear Association, the Retail Industry Leaders Association, and the Retail Council of Canada. The U.S. initiative comes after 40 European companies, including H&M, Marks & Spencer, Zara, and Carrefour, signed on to another, separate plan that commits them to help finance fire and safety improvements. That European alliance has attracted only a few American brands, including Abercrombie & Fitch, Calvin Klein, and Tommy Hilfiger, and Sean John, and a major Canadian retailer, Loblaw’s, producer of the Joe Fresh clothing line.

Why the different, competing efforts instead of a single initiative by all major global retailers? From the American side, the story goes that U.S. companies are concerned about legal liabilities in the European plan. Supporters of that accord claim that the American companies also dislike the binding obligations and cost commitments of the European agreement.

The differences between plans certainly reflects different cultural attitudes toward the social compact between more individualistic, free market American businesses and the more collective, highly regulated European companies. But the bottom line may be the real “bottom line” in this debate. As public companies, brands protect that bottom line to maximize profits for their shareholders. But as consumer facing companies, they also have to manage their brands’ equity. That brand value could be damaged if consumers connect the goods they buy with callous disregard by companies who order them up from workers whose lives are endangered in the making of those goods. I

t’s about time that American retailers consider a more expansive definition of bottom line values, one that includes workers rights as part of the dollar and cents calculations that result in sustainable profits.

I’m John Howell for 3BL Media

For more on this and other stories, go to 3blmedia.com

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