Ethical Performance
inside intelligence for responsible business


M&S taken off register over store closure plans

July 2001

Marks & Spencer has been taken off the investment register of a European ethical investment research organization after being accused of failing to inform staff early enough about the possible closure of 38 stores across the continent.

M&S is retrenching because the shops lost a combined $140million (£100m) in the last three years. But Ethibel, a Brussels-based body that provides a kitemark for ethical financial products and assesses the social and environmental performance of European companies, has removed the UK-based retailer from its register of approved companies ‘until further notice’.

Its register committee decided M&S had ‘failed to communicate in a responsible manner’ its closure plans, which had ‘serious consequences for a large group of employees.’

It said the decision, taken in March, to make the matter public before informing employees ‘undermined chances for a constructive consultation on the social consequences of the closure.’

The UK Listings Authority confirmed that its rules required M&S to announce the proposed closures before telling staff.

Ethibel said M&S ‘maintains some strong positive elements in its social policy’ but contrasted the UK-based retailer’s stance with that of the French food group Danone, also on its register, which is planning to shut down several factories in Europe.

The register committee said Danone had taken ‘great care’ to communicate its proposals to staff and had started talks with trade unions about ‘a well-negotiated social plan that will mitigate the social impact of its job cuts’. As a result, Danone would remain on the register ‘at this stage’.

Marks & Spencer disputed Ethibel’s claims. ‘We are undergoing extensive consultation with our staff across Europe about proposed store closures and we are working hard with our works councils to achieve a satisfactory outcome’, it said.

A new EU directive was signed by the UK government last month which will force large companies across Europe to consult workers before taking any decisions which may bring redundancies. The regulations will be phased in over the next seven years.


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