Investors put pressure on firms over Uighur forced labour

6 April 2021

Investors are ramping up their engagement with brands, including Adidas, Coca-Cola and General Motors, over their possible connection to Uighur forced labour through their supply chains. 

Non-profit initiative Investor Alliance for Human Rights is engaging with over 50 recognised brands in sectors including apparel, tech, food and beverages, and energy to draw attention to how business connections to the region may make brands complicit in human rights harms.

The Uighur region is deeply connected to global supply chains through provision of many raw materials, such as producing up to 20% of the world’s cotton and 45% of the world’s supply of polysilicon, a material used in solar panels.

Anita Dorett, program director for Investor Alliance for Human Rights, accused companies such as VF Corp - which owns brands including Vans and Timberland - and Zara owner Inditex of removing forced labour policies from their websites “in fear of commercial retaliation from the Chinese government”. 

“Even more concerning are brands such as Asics, Muji, Fila and Hugo Boss that are publicly doubling down on their commitment to source cotton from the Uighur region despite widespread reports of human rights abuses there,” she said. 

“As these brands succumb to this audacious intimidation, they should know they will be held accountable for their responsibility to respect human rights throughout their supply chains by their investors, customers and other stakeholders.”

The response comes as H&M faces a social media backlash in China over a statement the retailer had posted on its website, which said it was “deeply concerned” over reports of Uighur forced labour. Bloomberg reported some Chinese H&M stores had been closed by landlords in response to the statement.

Last year, the alliance called on brands to map their value chains to identify direct and indirect business relationships that are connected to the Uighur region, demonstrate steps to disengage from business relationships with suppliers connected with human rights harms and publicly disclose efforts and progress on this. 

Jan Erik Saugestad, CEO of Storebrand Asset Management, added: “As investors, we have a responsibility to not contribute to severe violations of human rights through our investments. Different countries including the EU are now coming out with regulation requiring companies to carry out human rights due diligence.

“Investors also need to do their part and require companies to respect human rights regardless of where they have operations, and this includes China. This is why it is important that we ask companies to map and disclose information about their supply chains, as well as disengage in activities that may contribute to human rights violations. We expect companies to take these issues seriously and thus we will escalate our dialogue accordingly where needed.” 

In January, the US announced it would detain all cotton products and tomato products produced in China’s Xinjiang Uighur Autonomous Region over forced labour concerns.

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