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Consumer Cyclicals
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Market Cap £82.48bn
Enterprise Value £81.29bn
Revenue £17.52bn
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EXCLUSIVE-Investors press companies on human rights in Xinjiang

Tue 30th March, 2021 5:00pm
By Ross Kerber and Victoria Waldersee
    BOSTON/LISBON, March 30 (Reuters) - A group of religious and
socially conscious investors and other funds are ramping up
pressure on Western companies over alleged human rights abuses
in China's Xinjiang region, highlighting the challenges for
brands trying to maintain their business ties amid rising
    The group of more than 50 investors, backed by the
Interfaith Center on Corporate Responsibility, said it is in the
process of contacting more than 40 companies, including H&M
 HMb.ST , VF Corp  VFC.N , Hugo Boss  BOSSn.DE  and Zara-owner
Inditex  ITX.MC , requesting more information about their supply
chains and urging them to quit situations that could lead to
human rights abuses.
    Anita Dorett, program director for the Investor Alliance for
Human Rights, which put together the request to the fashion
brands and other big corporate names, said she was worried that
some companies had moved to scrub language about policies on
forced labour from their websites, or pledged to buy more cotton
from Xinjiang, in fear of a backlash from Chinese social media
and companies.
    "Companies do not prioritise resources to digging into their
supply chains and mapping them out. As investors, we want
transparency and accountability," Dorett said in an interview.
She added that "This is their business. If they don't know
what's happening, who will?"

    Over the past week, H&M, Burberry  BRBY.L , Nike  NKE.N ,
Adidas  ADSGn.DE  and other Western brands have been hit by
consumer boycotts in China after raising concerns about forced
labour in Xinjiang.*:nL1N2LN0E5
    The wave of boycotts coincided with sanctions imposed by
Britain, Canada, the European Union and the United States over
what they say are human rights abuses taking place in Xinjiang.*:nL1N2LR02B
    China denies all accusations of abuse.*:nL1N2LK1T1 
    The investor alliance alleged that companies removing or
moving statements in relation to Xinjiang were doing so in fear
of commercial retaliation from the Chinese government. It also
said compliance rules were being developed in other markets,
including the European Union, obliging them to fully disclose
their supply chains.  
    The Human Rights section of H&M’s website on
Friday no longer carried a link to a 2020 statement on Xinjiang.
The statement could still be accessed through the page’s direct
    Inditex's statement on forced labour on its website was no
longer available as of last Thursday.
    H&M and Inditex did not immediately respond to a Reuters
request for comment on the investor group's approach. 
    H&M has declined to comment on the removal of details from
its website. Inditex has not responded to requests to comment on
removal of information from its website. 
    VF Corp's original statement on Xingiang was no longer
available, with a new statement published on a different section
of the site. A VF spokeswoman said on Tuesday the company had
"not changed our position, our policies or our practices" but
did not address the new location of its statement.
    Hugo Boss said last week on Chinese social media that it
would continue sourcing Xinjiang cotton. Company spokeswoman
Carolin Westermann said on Friday an undated English-language
statement on its website stating that "so far, HUGO BOSS has not
procured any goods originating in the Xinjiang region from
direct suppliers" was its official position and that the Chinese
statement was not authorised.*:nL4N2LP02P
    Westermann reiterated the company's position on Tuesday,
adding that it was in "active exchange with NGOs and other key
stakeholders, including investors, to outline our standards,
values and sustainability initiatives in more detail."
    Among investors, environmental, social and governance funds
have taken in big inflows of cash, putting companies on the spot
and prompting new financial disclosures on topics that were once
considered fringe issues best left to governments to
    Assets in sustainable funds hit a record $1.7 trillion in
2020, based on data from fund management industry tracker
    The Investor Alliance for Human Rights has more than 160
institutional investors and other organisations as members,
representing more than $5 trillion in assets under management
currently, its website said.
    The New York-based Interfaith Center on Corporate
Responsibility, which is backing the approach to the companies,
has a broad range of members, including religious groups, public
and union pension funds, and a number of other asset managers,
such as Aberdeen Standard Investments.
    The investor alliance does not include top U.S. fund groups
BlackRock Inc  BLK.N  and Vanguard Group Inc. With $16 trillion
in assets between them both companies are large shareholders in
many of the companies under pressure in China, based on
Refinitiv data.
    Both companies have ramped up their ESG efforts by
publishing more details of their engagements and proxy votes at
portfolio companies and by introducing new funds using ESG
criteria to pick holdings.
    A BlackRock spokesman noted a recent paper it published
stating: "Failure to address human rights-related risks can
reverberate across a company’s entire value chain, which may
...impact shareholder value."
    A Vanguard spokeswoman said that it "takes human rights
issues very seriously, including allegations of forced labor. If
a company’s business practices or products put people’s health
or safety at risk, they too can present long-term financial
risks to investors."   

 (Reporting by Ross Kerber, Victoria Waldersee, Additional
reporting by Anna Ringstrom. Editing by Jane Merriman)
 ((; (617) 856 4341; Reuters
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