The Sustainability Report recently recorded a live panel discussion entitled Labour Rights and other ESG issues in Asia, sponsored by Ausbil Investment Management.
The panel, which took place in Sydney, discussed the human rights risks in the supply chain, particularly in the global garment industry. Fast fashion garment brands globally as well as in Australia are facing a potential “inflection point” to their business model, with pressures from increased labour and environmental costs predicted to impact on how companies access factories overseas, according to Ausbil Investment Management’s Head of ESG Research, Måns Carlsson-Sweeny.
This video features the highlights from the panel discussion with Carlsson-Sweeny, Gershon Nimbalker, advocacy manager from NGO Baptist World Aid Australia and Wim Van Hyfte, Senior Fund Manager, SRI Specialist at Candriam Investors Group in Belgium.
Earlier this year, Carlsson-Sweeny made a field trip to China where he conducted on-the ground research to look at the global garment industry’s supply chain risks, factory standards, productivity and sustainability, as well as assessed impacts of potential labour costs and the impact of China’s new environmental laws, particularly those addressing water scarcity.
In addition to environmental costs and risks due to the highly water intensive nature of the textiles industry, Carlsson-Sweeny points to labour and wage risks in the supply chain for the garment sector, such as poor freedom of association and the gap between actual wages and living wages in China, Bangladesh, Cambodia and Sri Lanka. China has “come a long way in eradicating some of the worst types of labour rights issues,” but some of these issues may be on the rise again, he said.
Labour rights issues – and other sustainability risks in the supply chain – can be managed, but they require the development of longer term relationships between retailers and the factories from which they buy.