Norway’s central bank has announced they will be excluding Chinese textile manufacturer Luthai Textiles from their Government Pension Fund Global (GPFG) due to threats of human rights violations in their operations. Investigations by the bank uncovered underage workers, dangerous working conditions and lack of employee freedom within textile factories in a number of countries such as Cambodia and Myanmar. Since Luthai Textiles has not been able to demonstrate any improvements in their treatment of workers, the bank’s ethics council stated that the “risks of serious or systemic human rights violations” were unacceptable.
Human rights violations in factory manufacture may be a common occurrence, but the fact that a bank such as Norges, which had $5.7 million in Luthai Textiles, has decided to exclude the company from their GPFG fund for ethical reasons may be a signal that ethical considerations are becoming an important investment criterion. If this becomes more mainstream, manufacturers will be forced to improve working conditions for their employees in order to secure investors and to thrive in the competitive market. Will we be seeing a change in global market investing? And how much can we as consumers and citizens contribute to this?