Citing Multiple Human Rights Risks, Investors Escalate Engagements with Companies Doing Business in Uyghur Region

Companies urged not to succumb to intimidation in the face of Chinese government’s threats of commercial retaliation against companies citing forced labor risks in Uyghur Region.

NEW YORK, NY – TUESDAY, MARCH 30, 2021 – The Investor Alliance for Human Rights today announced that its members have stepped up their engagements with dozens of companies due to heightened exposure to egregious human rights risks as a result of their business ties to the Uyghur Region.

As has been widely reported, a human rights crisis has been unfolding in the Xinjiang Uyghur Autonomous Region in China since 2017. The Chinese government has extra-judicially detained an estimated 1.8 million predominantly Turkic and Muslim-majority peoples, including Uyghurs, in detention camps and prisons, many of whom have been forced to work in factories across China. The Chinese government, through the use of mass surveillance technology, is tracking these citizens without their knowledge or consent. These systems of repression enable religious and cultural persecution and political indoctrination.

In spite of these human rights abuses, the Uyghur Region remains deeply connected to the global supply chains of hundreds of companies, including 20% of the world’s cotton and about 45% of the world’s supply of polysilicon, a raw material used in manufacturing solar panels. A group of investors and members of the Investor Alliance and the Interfaith Center on Corporate Responsibility are actively engaging companies across a variety of sectors including apparel, tech, food and beverage, and energy, to focus attention on how business connections to the region may make brands complicit in these human rights harms.

Examples of some of the companies being engaged are Adidas ($ADDYY), Nike ($NKE), H&M ($HNNMY), Amazon ($AMZN), Apple ($AAPL), Google ($GOOGL), the Coca Cola Company ($KO), General Motors ($GM) and Siemens Gamesa Renewable Energy ($GCTAY). See the full list of companies being engaged here.

Said Anita Dorett, Program Director for the Investor Alliance for Human Rights, “We are now learning that several brands, including VF Corp. and Inditex, have taken down policies against forced labor from their websites in fear of commercial retaliation from the Chinese government. Even more concerning are brands such as Asics, Muji, Fila and Hugo Boss that are publicly doubling down on their commitment to source cotton from the Uyghur Region despite widespread reports of human rights abuses there. As these brands succumb to this audacious intimidation, they should know that they will be held accountable for their responsibility to respect human rights throughout their supply chains by their investors, customers and other stakeholders.”

“As investors, we have a responsibility to not contribute to severe violations of human rights through our investments. Different countries including the EU are now coming with regulation requiring companies to carry out human rights due diligence,” said Jan Erik Saugestad, CEO of Storebrand Asset Management. “Investors also need to do their part and require companies to respect human rights regardless of where they have operations, and this includes China. This is why it is important that we ask companies to map and disclose information about their supply chains, as well as disengage in activities that may contribute to human rights violations. We expect companies to take these issues seriously and thus we will escalate our dialogue accordingly where needed.” 

In August 2020, the Investor Alliance published Practical Guidance for Investors on the human rights risks of doing business in the Uyghur Region to help build investor capacity to engage companies on the issue. The investors further laid out their expectations of companies in a letter they have thus far sent to 47 companies.  The letter was endorsed by 57 investors representing over $US4.4 trillion in assets. Specifically, the letter calls on companies to:

• Complete a mapping of their value chains in and outside of China, to identify direct and indirect business relationships that are connected to the Uyghur Region;
• Demonstrate steps to disengage from business relationships with suppliers and/or customers connected with human rights harms in and from the Uyghur Region; and
• Publicly disclose efforts and progress on the above, including on how companies are working with affected rights-holders in determining remedy.

The Investor Alliance is a member of the Coalition to End Uyghur Forced Labor, comprising civil society organizations, Uyghur human rights groups, and trade unions, that are united to end state-sponsored forced labor and other egregious human rights abuses against people from the Uyghur Region.  The Coalition has issued a Call to Action to apparel companies that requires apparel signatory companies to disengage from business relationships that are connected to forced labor and other abuses in the Uyghur Region, as it relates to cotton and cotton-products.

“Businesses need to acknowledge that it’s impossible to conduct independent audits in such a highly repressive environment,” said Zumretay Arkin of the World Uyghur Congress.  “Companies need to do better in terms of understanding the underlying issues, but mostly end their relationships with suppliers suspected of using forced labor. All of these companies have adopted a 'no tolerance policy’ on forced labor, but ultimately, their actions speak louder than words.”

In response, in January the U.S. Customs and Border Protection Agency (CBP) issued a Withhold Release Order (WRO) against cotton and tomato products produced in Xinjiang “based on information that reasonably indicates the use of detainee or prison labor and situations of forced labor”.

“Investors need to collaborate with other stakeholders, including civil society groups, to influence companies, governments and international organizations to take action to prevent these harms,” said Lauren Compere of Boston Common Asset Management. “We will continue to use our leverage as shareholders to hold portfolio companies accountable on their ties to the Uyghur Region, including, if necessary, through the filing of shareholder proposals.”

About the Investor Alliance for Human Rights

The Investor Alliance for Human Rights is a collective action platform for responsible investment that is grounded in respect for people’s fundamental rights. Its members include asset management firms, public pension funds, trade union funds, faith-based institutions, family funds, and endowments. Collectively, they represent over US$5.5 trillion in assets under management and 18 countries. The Investor Alliance is an initiative of the Interfaith Center on Corporate Responsibility.

Visit our website at: https://investorsforhumanrights.org/ and follow us on Twitter: @InvestForRights

CONTACT:
Susana McDermott
ICCR, Director of Communications
201-417-9060
smcdermott@iccr.org