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GreenMoney Journal - publishing since 1992
Fall 2010 issue
Socially Responsible Investing – Better Companies, Better Communities
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Gap Inc. Ranks Overseas Factories on Treatment of Workers - Coalition of Social Investors Helps Create Groundbreaking Report
For the first time, a clothing retailer has publicly rated the way its overseas factories treat
their employees. Gap Inc.'s new Social Responsibility Report is the result of two years of dialogue
between the company and a coalition of socially responsible investors.
Gap's Social
Responsibility Report presents a rating system for evaluating supply factory compliance with the
company's code of conduct. The report uses a quantitative ranking system to examine whether
suppliers use physical punishment or coercion, protect their workers' right to freedom of
association, pay at least the minimum wage, or require excessive overtime.
In addition to
a scored ranking system, Gap's Social Responsibility Report provides regional compliance indicators
relative to all major elements of the company's code of conduct for suppliers. The report also
reveals the number of supplier facilities audited by region and discusses central issues related to
non-compliance.
"Today, there is no generally accepted reporting format for supply chain
compliance. The Gap report is an important step in the direction of a model format that other
companies can adapt and improve upon," said David Schilling, Director of Global Corporate
Accountability for the Interfaith Center on Corporate Responsibility (ICCR).
ICCR is a
member of the shareholder group, along with Domini Social Investments, the As You Sow Foundation,
the Calvert Group, and the Center for Reflection, Education and Action (CREA).
This
report presents the first attempt by a clothing retailer to publicly rank the relative level of
compliance by factories with its code of conduct. "Nearly a decade after major retailers began to
develop codes of conduct for their supply chains to deter sweatshop conditions, it is virtually
impossible to determine levels of compliance with these codes," said Adam Kanzer, Director of
Shareholder Advocacy for Domini Social Investments, the manager of the Domini Social Equity Fund
(NASDQ: DSEFX). "To restore and maintain the confidence of consumers and investors, it is essential
that retailers issue public reports detailing code compliance."
"While companies say that
they have been steadily improving the quality of their vendor standards enforcement, they have
generally not been willing to share meaningful data to verify their assertions," said Alya Kayal,
Senior International/Human Rights Analyst for Calvert.
"Establishing a meaningful public
benchmark that helps stakeholders and the general public understand and measure the company's
progress is a valuable step forward on public disclosure," she added.
"In our view,
corporate social compliance systems should exist to bring working conditions in line with
internationally accepted human rights standards," said Ruth Rosenbaum, Executive Director of CREA.
"These systems are critically important to helping workers protect their rights. We commend Gap for
recognizing that its code of conduct sits within this broader context of international human rights
norms. It is an important recognition of public accountability."
"Companies need to be
held accountable for enforcement of their codes of conduct," said Conrad MacKerron, Director of the
Corporate Social Responsibility Program of As You Sow. "Otherwise they run the risk of misleading
investors by suggesting that adoption of a code implies adequate monitoring and enforcement."
Members of the group plan to expand existing dialogues with other retailers to encourage them
to match Gap's public report. Gap's report is available online at http://www.gapinc.com
About the Participants
As You Sow Foundation
As
You Sow is a non?profit social change organization dedicated to promoting corporate accountability,
social justice, and environmental protection. As You Sow helped manage the dialogue with Gap, Inc.
on behalf of Domini Social Investments. For more information, visit http://www.asyousow.org
Calvert
Calvert is the nation's largest family of socially responsible
mutual funds with approximately $10 billion in assets under management among twenty-seven funds,
including an extensive lineup of tax-free and taxable fixed income products in addition to socially
and environmentally screened funds, allowing individual and institutional investors to pursue a
broad range of investment objectives within a single fund family. Calvert also maintains the
Calvert Social Index a benchmark for measuring the performance of large, U.S.-based socially
responsible companies. For more information on Calvert and its products and services, go to
http://www.calvert.com
CREA
The Center for Reflection, Education and
Action (CREA) is a faith-based social economic research, education, and action center located in
Hartford, Connecticut. Additional information about CREA and its work on purchasing power,
corporate responsibility, and economic justice can be found at http://www.crea-inc.org
Domini Social Investments
Domini Social Investments manages more than $1.8
billion in assets for individual and institutional mutual fund investors seeking to create positive
change in society by integrating social and environmental criteria into their investment decisions.
Additional information on Domini Social Investments is available on the firm's website,
http://www.domini.com
Interfaith Center on Corporate Responsibility
(ICCR)
ICCR's membership is an association of 275 faith- based institutional
investors, including national denominations, religious communities, pension funds, endowments,
hospital corporations, economic development funds and publishing companies. ICCR and its members
press companies to be socially and environmentally responsible. Each year ICCR- member religious
institutional investors sponsor over 100 shareholder resolutions on major social and environmental
issues. The combined portfolio value of ICCR's member organizations is estimated to be $110
billion. For more information, visit http://www.iccr.org
CONTACTS:
Adam Kanzer, Esq.
Domini Social Investments LLC
212-217-1027
akanzer@domini.com
Alya Z. Kayal, Esq. Calvert
Group Ltd.
301-951-4864
alyakayal@calvert.com
Conrad MacKerron
As You Sow Foundation
415-391-3212 x31
mack@asyousow.org
Ruth Rosenbaum, TC, Ph.D.
CREA:
Center for Reflection, Education and Action, Inc.
860-527-0455
crea-inc@crea-inc.org
David M. Schilling
Interfaith Center on Corporate
Responsibility
212-870-2928
dschilling@iccr.org
Article Source:
Domini
Social investments
The Domini Funds are subject to market risks and are not insured. You
may lose money. As of April 30, 2004, Gap, Inc. represented 0.36% of the Domini Social Equity
Fund's portfolio. The Fund's portfolio is subject to change. Please obtain a prospectus, which
contains more information including investment objectives, fees, expenses, and risks, by calling
1-800-762-6814 or online at www.domini.com. Read it carefully before you invest or send money. DSIL
Investment Services LLC (DSILD), Distributor. DSILD and the entities named above are not
affiliated. 5/04
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