Norges Bank becomes signatory to apparel industry push on social and labour rights

Norges Bank Investment Management (NBIM), the arm of the Norwegian central bank that runs the assets of the Government Pension Fund Global, has signed up to an initiative within the apparel manufacturing sector to improve social and labour conditions.

It is putting its NOK7trn (€742bn) weight behind the Social and Labor Convergence Project, facilitated by the Sustainable Apparel Coalition (SAC), a group launched in 2011 that is developing a standard for assessing conditions in supply chains.

That standard is called the Higg Index, inspired by the Higgs boson from particle physics. It’s a standardized supply chain measurement tool for all industry participants to understand the environmental and social and labor impacts of making and selling their products and services.

“The apparel industry is important for the fund, which has investments in more than 300 companies in the industry across the world,” NBIM says – adding the investments represent almost 3% of its total equity investments. It wants to “contribute to the development of better market practices and a more sustainable apparel industry”.“In our responsible investment strategy, we give priority to the areas of standard setting, ownership and risk management,” write Petter Johnsen, Chief Investment Officer, Equities, and William Ambrose, Global Head of Ownership Strategies, in a letter to the SAC.

The fund expects companies, as a starting point, to base their practices on global standards such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights, the OECD Principles of Corporate Governance and the OECD Guidelines for Multinational Enterprises.

Johnsen and Ambrose add that they see Norges’ participation in the initiative as a way to work on children’s rights issues, one of its target areas. “We believe child labour cannot be addressed in isolation and must be seen in the broader context of social and human rights issues.”

SAC was launched by a group of leading clothing companies like Adidas, Gap, Levi Strauss, Marks & Spencer, Nike, Patagonia, Timberland and Walmart alongside NGOs, academics, the Environmental Defense Fund and the US Environmental Protection Agency. It is currently chaired by Jim Goddard, Director of Advanced Sustainability Analytics at Nike.