It seems that corporate social responsibility has been raised a notch these days. These days, it is not just enough to have your company employees make contributions to their local communities. Retail investors like you and me are voting with their dollar and wish to be more discerning with their investing choices. Hence, firms also must be attuned to prevailing ESG trends and internalise diversity and inclusivity into the fabric of their corporate operations. I do wish to be more of an activist investor in future, so when I came across the sustainability report by UNIQLO, I decided to read it to understand better about how ESG may be undertaken by firms.
Now, I understand that I ought to take everything outlined in the sustainability report with a pinch of salt because this may just be savvy impression management by the corporate communications team at UNIQLO. Nevertheless, I thought it would be a good thing for me to learn some of the current initiatives and considerations in the ESG world.
Environment
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I like it that UNIQLO piloted a product-to-product recycling programme called RE:UNIQLO. So, its recycled down jackets are filled completely with reclaimed form and feathers originally from 620,000 down products. I think UNIQLO has gone the extra mile in its recycling efforts since most apparel companies will stop at redistributing recycled clothing to deserving beneficiaries. However, no one really knows if these beneficiaries will wear these hand-me-downs in the end. Using recycled materials in new down jackets helps ensure a better utilisation of resources.
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I also appreciate how UNIQLO uses recycled polyester materials made from post-consumer PER bottles in its polo shirts and pullover shirts as a means of alleviating plastic pollution.
Social
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So UNIQLO joined the Better Work initiative, which is a joint program between the International Labour Organisation and the World Bank Group’s International Finance Corporation to pick up best practices in safeguarding the welfare and interests of its employees. In view of the current Covid pandemic, it provides its factories with clear guidelines like hand washing and body temperature measurements so that they can ensure high sanitation standards.
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Promoting a diverse and inclusive workforce is increasingly the norm for human rights-respecting companies, so UNIQLO doesn’t really score points for coming up with flexible work arrangements for working mums and employees with disabilities. I am impressed though by how it has the “Partnership Registration System” that offers employees with same-sex partners company benefits like special leave for weddings and funerals. This is a radical and progressive move for a country that is largely patriarchal! This is a great demonstration of respecting the dignity of every individual. Singaporean firms will do well to follow in UNIQLO’s footsteps.
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I also like it that UNIQLO hires refugees to work in its stores around the world. I think refugees are a highly neglected and discriminated community because citizens from their host countries may be wary of them for stealing their jobs. To have UNIQLO lead the way in hiring refugees so that they can foster connections with citizens is, I think, the best way to integrate refugees into their host countries.
Governance
- I like it that UNIQLO established a Human Rights Committee so that respect for human rights of employees can be guaranteed. Apparently, there is a hotline for people to report human rights violation and the Committee is said to investigate the case as well as recommend remedial measures. Now, this may sound like surveillance but I am of the opinion that structure drives behaviour, so when there are anti-violation measures rigorously in place, people will be less likely to abuse their power and authority. What say you? 1
Footnotes
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Uniqlo (Fast Retailing) is one of my favourite brands, so I once wrote about their ESG efforts on my blog. NFA, of course. ↩