The Fair Labor Association: A Useful Tool For Investors
— June 28, 2019
By Michael Posner
I was closely involved in the early years of the FLA and now chair its board. More than 60 major apparel companies, representing brands such as Adidas, Calvin Klein, Nike and Uniqlo, have joined the organization. They participate in a rigorous accreditation process in which the FLA evaluates whether the companies have adequate systems in place to protect workers’ rights. Additionally, factories producing their goods are independently monitored with the results made public. The companies then work alongside the FLA to remedy the problems that are routinely discovered. A comparable model is in the works for agriculture with companies like Nestle, Olam and Syngenta.
It’s important to view the FLA’s ambitious accreditation program in a broader context. In recent years, a growing number of investors have sought to identify companies with strong environmental and human rights records, looking to invest in industry leaders. Responding to this demand, certain rating agencies now assess what are called environmental, social and governance (ESG) metrics. While efforts to measure and apply these metrics are beginning to gain steam, especially among millennials and women, there are significant challenges ahead, especially in addressing social or human rights issues in a meaningful
Read the full Forbes article.
Michael Posner is a Professor of Business and Society and Director of the NYU Stern Center for Business and Human Rights.