Global brands "intimidated by the Chinese government", says action group

Diplomatic tensions over the Xinjiang Uyghur Autonomous Region of China has led to a group of investors renewing their commitment to engage with portfolio companies over suppliers that may be connected to alleged human rights abuses.

The Investor Alliance and the Interfaith Center on Corporate Responsibility are demanding answers from companies across a range of sectors on how business connections to the region may make brands complicit in these human rights abuses.

Anita Dorett, program director for the Investor Alliance for Human Rights, said several brands, including VF Corp. and Inditex, had taken down policies against forced labour from their websites in fear of commercial retaliation from the Chinese government.

Other examples of some of the companies targeted by the group include Adidas, Nike, H&M, Amazon, Apple, Google, the Coca-Cola Company, General Motors and Siemens Gamesa Renewable Energy.

Dorett added that it was even more concerning that brands such as Asics, Muji, Fila and Hugo Boss were 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,” she said.

Supply chain risks for investors

Since 2017, there have been growing reports about a human rights crisis in the Xinjiang Uyghur Autonomous Region in China. The Uyghur Region is 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.

The Investor Alliance for Human Rights said 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, enabling religious and cultural persecution and political indoctrination.

“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."

Saugestad concluded: "We expect companies to take these issues seriously and thus we will escalate our dialogue accordingly where needed.”