In the following op-ed published by Responsible Investor, Shannon Rohan, Director of Responsible Investment Leadership, Shareholder Association for Research and Education (SHARE), and Michael Musuraca, Co-Chair, Verite, and Board Member, Sustainalytics discuss workplace fissuring and the need for meaningful disclosure. From the op-ed:
“In some ways, the complexities and hidden problems that continue to exist in global supply chains are being replicated in the new kinds of employment relationships that we are seeing in companies’ direct operations. For example, there are some striking similarities in the conditions leading up to the Rana Plaza factory collapse in Bangladesh and the BP Deepwater Horizon disaster in terms of the role that complex contracting relationships at each site played in obfuscating who was ultimately responsible for the safety of those operations. In both cases, these complex business relationships may have also contributed to safety being jeopardized in order to meet short-term performance targets and deadlines set by the lead companies – in the case of the Deepwater disaster, BP and in Rana Plaza, major global clothing brands.
“Investors are grappling with trying to understand these complex business relationships and the impacts they might have for individual companies, for portfolios and for the social and financial systems upon which their investment returns ultimately depend.
“One of the key challenges that investors face is a lack of meaningful disclosure from companies about their workforce – particularly those parts of the workforce that are falling through the cracks of a fissured workplace.”
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