The $30m (€22.4m) reserve fund for members of the AFL–CIO (American Federation of Labor and Congress of Industrial Organizations), America’s biggest union federation, has urged fellow shareholders in clothing firm Ralph Lauren to back a proposal that would oblige the company to identify and disclose human rights risks within its supply chain.
The proposal comes exactly a week before Ralph Lauren’s annual general meeting (AGM) in New York and cites the United Nations’ Guiding Principles on Business and Human Rights – known as the ‘Ruggie Principles’ – which hold that companies should review the human rights risks associated with their business, communicate those risks and act upon them.
According to the AFL–CIO, the importance of such a review has been laid bare by last year’s textile factory disaster in Bangladesh. In the event, the Rana Plaza textile factory, which supplied such Western apparel retailers as Benetton (Italy), MANGO (Spain), Bonmarché (UK) and Walmart (US), collapsed, killing more than 1,000 workers and injuring 2,500 more. Structural decay was cited as the reason for the building’s collapse.
While Ralph Lauren was not supplied by Rana Plaza, the AFL–CIO said the company had other suppliers in Bangladesh, and hence faced potential human rights risks there.“Given the high profile of the Rana Plaza tragedy, we believe Ralph Lauren should disclose what specific steps it has taken in Bangladesh to prevent human rights abuses,” wrote the AFL–CIO in its letter, adding that the company’s board had until the 2015 AGM to do so.
The union also dismissed Ralph Lauren’s recent CSR (corporate sustainability responsibility) report as insufficient, noting that the report lacked detail about its supply chain in Bangladesh. The AFL–CIO also suggested Ralph Lauren could minimise those risks by signing an accord that aims to improve the safety of Bangladeshi workplaces. Around 150 Western retailers, including PVH Corp., a close rival of Ralph Lauren, have signed the accord.
For its part, Ralph Lauren’s board recommends that shareholders vote against the AFL–CIO proposal. It says the company already respects the “the standards and declarations set forth in the stockholder proposals and provides disclosed regarding human rights and other corporate social responsibility matters.” As a result, the board believes the proposal would be a “diversion of corporate resources with no significant benefit to stockholders.” Ralph Lauren proxy