New York, N.Y. - November 17, 2011 – With The California Transparency in Supply Chain Act, or SB 657, just weeks from becoming law, the Interfaith Center on Corporate Responsibility (ICCR), Christian Brothers Investments Services (CBIS), and Calvert Investments have published a corporate guide to ensure effective compliance with the California Transparency in Supply Chains Act: “Effective Supply Chain Accountability: Investor Guidance on Implementation of The California Transparency in Supply Chains Law and Beyond”.
The first legislation of its kind in the U.S., SB 657, which takes effect on January 1, 2012, requires manufacturers and retailers doing business in California to disclose on their corporate websites their efforts to eliminate slavery and human trafficking from their direct supply chains. The requirements apply to companies that conduct business in California and have global gross receipts exceeding $100 million. It is expected to affect more than 3,000 companies worldwide.
The Guide identifies good corporate practices to ensure corporate compliance with the law, the business case for compliance, shareholder expectations, and the elements of a comprehensive human rights due diligence framework. ICCR, CBIS and Calvert Investments, all of which are dedicated to socially responsible investing, developed this Guide based on their long-term corporate engagements on human rights and supply chain issues.
“The California Transparency in Supply Chains Act will have a far-reaching impact in the business world and it is critical that companies understand exactly what is expected of them,” said Julie Tanner, Assistant Director of Socially Responsible Investing at CBIS. “The law may have California’s name in its title, but its effects will be felt far beyond the state. Most major retailers and manufacturers doing business in California will need to comply, regardless of where they are headquartered. Our guide offers straightforward guidance on complying with the Act that comes from experienced and concerned investors with a vested interest in our companies’ success. At CBIS, we have been working for more than a decade to promote supply chains that are free of forced and child labor,” continued Tanner. “We understand all too well the implications and risks inherent if problems are discovered.”
Specifically, the Act requires companies to disclose the extent to which they assess and address risks of human trafficking in their supply chains, conduct audits of suppliers to evaluate compliance with company standards, train employees, certify that materials incorporated into the product comply with trafficking laws, and maintain internal accountability standards and procedures for employees or contractors failing to meeting company standards. The Guide summarizes the law’s key requirements and presents the business case for compliance. It also makes recommendations for more robust human rights programs that will transcend the California law and withstand future legislation as well as the scrutiny of responsible investors and analysts globally.
Mike Lombardo, Senior Sustainability Analyst and Manager, Index, at Calvert Investments, said, “Ensuring that companies comply with regulation and actively manage human rights risks is an essential component of Calvert’s sustainable investment analysis. The Guide is intended to help companies go beyond compliance with the Act’s minimum requirements. We offer a broader strategy for companies to eliminate business and reputational risks associated with human rights abuses in their supply chains. This Guide identifies good practices that show what leading companies are doing to systematically incorporate human rights in their due diligence processes.”
Companies highlighted in the Guide for good practice include Ford, Hewlett Packard, Nucor, Levi Strauss & Co., Gap, and Adidas.
David Schilling, Program Director for Human Rights at the Interfaith Center on Corporate Responsibility, said, “We believe that additional legislation, at both the state and federal levels, addressing these egregious human rights violations in company supply chains is inevitable. The California Supply Chain Act may be the first law of its kind in the nation, but it will most certainly not be the last. As shareholders, ICCR members have worked with leading companies across many sectors on good practices around supply-chain transparency and accountability, and they are stronger and more resilient as a result. As responsible investors, we understand that exposing and eliminating these abuses is in everyone’s best interest.”
To download a copy of the guide, please go to http://www.cbisonline.com/file.asp?id=1144.
About the Interfaith Center on Corporate Responsibility (ICCR)
Currently celebrating its 40th year, ICCR is the pioneer coalition of active shareholders who view the management of their investments as a catalyst for change. Its 300 member organizations with over $100 billion in AUM have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world. www.iccr.org
About Christian Brothers Investment Services, Inc.
Christian Brothers Investment Services, Inc. (CBIS) is a leader in Catholic socially responsible investing (SRI) with approximately $4 billion in AUM for more than 1,000 Catholic institutions worldwide, including dioceses, religious institutes, educational institutions, and health care organizations. CBIS’ combination of premier institutional asset managers, diversified product offerings, and careful risk-control strategies constitutes a unique investment approach for Catholic institutions and their fiduciaries. CBIS strives to integrate faith-based values into the investment process through a disciplined approach to socially responsible investing that includes principled purchasing (stock screens), active ownership strategies (proxy voting, dialogues, and shareholder resolutions), and community investment. www.cbisonline.com
About Calvert Investments, Inc.
A leader in Sustainable and Responsible Investments (SRI), Calvert offers investors among the widest choice of SRI strategies of any investment management company in the United States. Each SRI strategy employs one of three proprietary approaches. Calvert Signature® Strategies integrate two distinct research frameworks: a rigorous review of financial performance plus a thorough assessment of environmental, social, and governance (ESG) performance. Only when a company meets Calvert standards for both frameworks will we consider investing. Calvert Solution® Strategies selectively invest in companies that produce products and services designed to solve some of today’s most pressing sustainability challenges. Calvert SAGE™ Strategies emphasize strategic engagement to advance ESG performance in companies that may not meet Calvert standards today, but have the potential to improve. More information on Calvert SRI strategies is available at www.Calvert.com/SRI.