InvestAssure is helping to identify poor performance, EHS non-compliances and other unethical behaviour in supply chains and investment (or lending) portfolios at an early stage, enabling more effective risk mitigation, stakeholder communication and business assurance. We monitor the web for corporate allegations and incidents, covering 4,500 companies. We also provide customised consulting and assurance services and have developed an online tool for facility self-assessment and e-learning.
Bangladesh - what should we learn? Can we re-engineer responsible sourcing?
tragedy in Dhaka has brought out the campaigners and media
complaining about western consumer habits, low prices, globalisation
and irresponsible retailers and brands. But three inconvenient
truths are often passed by in the quest to blame the west.
Firstly, the blame for this tragedy lies fairy and
squarely with the building/factory owner and the authorities.
Secondly, the emotive focus on garment brands is misleading.
Nearly everything we buy now has some component sourced from
emerging economies. So why don't we see regular bursts of outrage
about Chinese coal mines where the fatality rate is ten times higher
than in OECD countries, causing thousands to die every year.
Thirdly, this problem will never be solved by changing western
consumer habits alone, nor by increasing prices.
Firstly, the blame for this tragedy lies fairy and squarely with the building/factory owner and the authorities. Secondly, the emotive focus on garment brands is misleading. Nearly everything we buy now has some component sourced from emerging economies. So why don't we see regular bursts of outrage about Chinese coal mines where the fatality rate is ten times higher than in OECD countries, causing thousands to die every year. Thirdly, this problem will never be solved by changing western consumer habits alone, nor by increasing prices.
Nevertheless, for investment managers and supply chain
managers, this is the latest in a line of tragedies to cause more
than the odd headache at HQ – Bangladesh fires, China suicides,
Philippines child labour. We have been reviewing some of the options
which have surfaced recently.
Nevertheless, for investment managers and supply chain managers, this is the latest in a line of tragedies to cause more than the odd headache at HQ – Bangladesh fires, China suicides, Philippines child labour.What, if anything, can or should be done to reduce the significant reputational and other business risks which accompany emerging economy investment? Can we re-engineer the responsible sourcing model?
We have been reviewing some of the options which have surfaced recently. Read more.
Nimbus - April
Every month we publish Nimbus - a register of companies included in our monthly listing of corporate risk alerts. These alerts are raised when our multilingual web scanning tool identifies an incident or allegation which our local researchers verify to be true or worthy of investigation.
The size of the words in Nimbus risk clouds reflects both the frequency and severity of allegations and incidents relating to a particular company. This provides a relative indication of risk if you are doing business with that company. All Nimbus risk clouds can be viewed on our Nimbus page.Please contact us for further information.
Global Cost of Consumed Natural Capital 13% of GDP
A recent report by TRUCOST for the TEEB for Business Coalition concludes that the 'externalised' costs of natural capital consumption across the world amount to US$ 7.3 trillion - 13% of GDP in 2009. The majority of unpriced natural capital costs are from greenhouse gas emissions (38%), followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%) and waste (1%). Sectors contributing most include coal power generation in eastern asia and northern america, wheat farming in southern asia, and cattle ranching in South America and Southern Asia.
Food and timber processing, as well as leather and hide tanning, are the sectors which pass most externalised costs through supply chains. The 10 sectors with the greatest overall impacts (direct impacts from their own operations plus indirect impacts flowing along the supply chain), which also have at least half of these estimated to be in their supply chains, are all involved in food production and processing.
Textile Industry Sustainability Platform Guide on Energy Efficiency
TISP has published an introductory guide for suppliers and factories to understand the business case and benefits of implementing sustainable initiatives starting with energy efficiency. The energy efficiency guide provides a step-by-step guide for factories who want to take action to improve energy efficiency. This is supported by case studies which illustrate the benefits of factories which have implemented their own energy efficiency initiatives.
TISP is a collaborative effort sponsored by seven apparel brands: Columbia Sportswear, Fifth and Pacific, GAP, H&M, JCrew, New Look and Pentland Brands. Apparel brands can use the guide within their own training or communications to promote the benefits of energy efficiency to their suppliers and partners as well as the wider business case for brands and suppliers to implement sustainability initiatives.
Analysis Reveals Ethical Risk Ranking of Asian Countries
An analysis of the InvestAssure web monitoring database has revealed China, Burma, Indonesia and India as the riskiest Asian countries in terms of the frequency and severity of incidents and allegations relating to responsible business. Least risky were New Zealand, Taiwan, Mongolia, Australia and Japan.
China was by far the biggest source (45%) of reported incidents and allegations. Over 50% of China alerts came from the manufacturing sector and the dominant risk categories were Occupational Health and Safety and the Environment.
In Indonesia 30% of risk alerts related to the paper industry and 25% to manufacture of oils. Reported allegations and incidents varied in terms of their seriousness and consequent risk level from a business perspective. Moreover, these rankings can change significantly depending on which sector is of interest.