The Rana Plaza disaster

The Rana Plaza disaster happened on April 24, 2013, near Dhaka, Bangladesh, when a eight-story building housing several textile factories collapsed. More than 1,100 people died and over 2,500 injured, making it the worst accident in the history of the garment industry. Workers had raised concerns about visible cracks in the building the day before, but production continued under pressure to meet international orders.

Several international brands produced clothes in Rana Plaza including Benetton, Prada, Gucci, Versace, Moncler, El Corte Inglés,Monsoon, Accessorize,Mango,Primark and Walmart.  Many of the brands did not know that their clothes were produced in these factories. After the disaster, many companies signed the Accord on Fire and Building Safety in Bangladesh, a legally binding agreement involving brands and trade unions to conduct independent inspections and enforce improvements of factory conditions. Compensation efforts varied: some brands provided direct payments to victims’ families, while others contributed to the Rana Plaza Donors Trust Fund. Others did not compensate victims.  Regulations of the textile industry in Bangladesh also became stricter after the accident. Source: Wikipedia

Research example: The effect of 40% women in corporate boards

A Norwegian law introduced in 2003 mandated public limited companies to have at least 40% of board seats held by each gender. After the new law, the women who were appointed to boards were generally more qualified than their predecessors, and the wage gap among board members shrank. However, the quota had little or no spillover effect: it did not significantly improve outcomes for other women in those firms, including highly qualified women who were not appointed, and it did not change enrollment in business education.

Bertrand, M., Black, S. E., Jensen, S., & Lleras-Muney, A. (2019). Breaking the glass ceiling? The effect of board quotas on female labour market outcomes in Norway. The Review of Economic Studies, 86(1), 191-239.

Should Bergans and Active Brands Continue Producing in Myanmar?

Bergans and Active Brands face a tough choice about continuing production in Myanmar. Staying provides thousands of workers, especially women, with much-needed jobs and allows the companies to monitor conditions and promote better labor standards. Leaving, they argue, could worsen poverty for people who rely on these factories. However, critics warn that staying helps legitimize the military regime and indirectly supports its human rights abuses. It also exposes the companies to ethical and reputational risks, suggesting they put profit above responsibility. Source: Frifagbevegelse

Research example. Corruption as a norm

Abstract:  We study cultural norms and legal enforcement in controlling corruption by analyzing the parking behavior of United Nations officials in Manhattan. Until 2002, diplomatic immunity protected UN diplomats from parking enforcement actions, so diplomats’ actions were constrained by cultural norms alone. We find a strong effect of corruption norms: diplomats from high‐corruption countries (on the basis of existing survey‐based indices) accumulated significantly more unpaid parking violations. In 2002, enforcement authorities acquired the right to confiscate diplomatic license plates of violators. Unpaid violations dropped sharply in response. Cultural norms and (particularly in this context) legal enforcement are both important determinants of corruption.

Fisman, R., & Miguel, E. (2007). Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets. Journal of Political Economy, 115(6), 1020–1048. https://doi.org/10.1086/527495

Social sustainability at Maersk Group

Maersk Group is a Danish shipping and logistics company with over 100 000 employees and activities in more than 130 countries. In their sustainability report they report on the following main categories under the heading of social sustainability:

• Safety and security. Maersk had a lost-time injury rate (the number of lost-time injuries per million hours worked) of 1.10 in 2023, up from 0.93 the year before. 4 people lost their lives on the job in 2023, down from 9 the year before. Security risks identified by Maersk include “people (our duty of care, travel and expat security), cargo (theft, bribes, non-compliance), illicit cargo (contraband including drugs and illegal wildlife and timber), conflict (armed conflict, terrorism, geopolitical instability) and facilities (customer security compliance)”. Two of Maersk’s ships were attacked by Houthi forces on their way to the Suez Canal. Fortunately, nobody on board the Maersk ships were injured.
• Human capital, where they present how they develop and maintain a motivated work force. Employee engagement went down from 2022 to 2023 and was below targets.
• Diversity, equity and inclusion, presenting initiatives and results regarding diversity and inclusion. Maersk targets 40% women in leadership positions by 2025 and 30% executives from non-OECD-countries. They are almost on track of achieving this, with 35% women in 2023 (up from 33% in 2022) and 20% from non-OECD-countries (up from 16% in 2022).
• Employee relations and labour rights, discussing principles and procedures for securing employee involvement and labour rights in all parts of the organization as well as in the supply chain
• Human rights, presenting how they include human rights issues in their management systems and processes. Under the “governance”-heading in the sustainability report Maersk presents how they work on several topics related to social sustainability, such as business ethics (including avoiding corruption), sustainable procurement (including how to screen and work with suppliers to secure social sustainability in the supply chain), responsible taxation (from 2023 Maersk publishes the amounts of taxes paid in each country it operates), and citizenship (presenting contributions to disaster relief and collaborations with NGOs)

Sources: Maersk sustainability report 2023, Maersk tax report 2023