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Commentary: Investors should ask co's about effectiveness of their due diligence process incl. audits at identifying & remediating labour rights abuses

Author: Judy Gearhart, openDemocracy, Published on: 26 March 2019

"Corporate social responsibility helps hide workers’ rights abuse until brands can quietly exit", 1 March 2019

Despite their well-documented limitations and brands acknowledging the need for improvements, most CSR initiatives continue to resist the structural changes needed...

[T]hey [generally] rely on credentialed outsiders, who have little to no ties to workers and their communities. Global brands and retailers tend to bargain-hunt with the auditing industry... Auditors seeking to win contracts are largely assessed in terms of their capacity to work quickly. They usually have a set number of days on site and whatever they come back with becomes their findings. This approach has cost lives...

[M]ost audits are confidential and voluntary. They come with no meaningful role for workers and their organisations, and virtually no repercussions for the brands when workers’ rights are abused or their safety is put at risk. This enables brands to silence findings and walk away if the code of conduct auditors find problems too difficult to fix.

Socially responsible investors can help change this approach by asking the companies they invest in for more meaningful information about their supply chain due diligence process, especially its effectiveness at identifying and remediating labour rights abuses...

Socially responsible investors can [...] ask... companies to demonstrate their impact on workers’ ability to exercise their rights...

Read the full post here