Ethical Performance
inside intelligence for responsible business


pragmatism urged in China

January 2005

Socially responsible investments can be made in China if investors are willing to overlook obstacles on staff access to free trade unions, a study suggests.

An analysis by Switzerland-based Bank Sarasin says a main stumbling block is that no company can comply fully with ILO standards in China because independent trade unions are banned.

The study, Made in China, concludes, however, that SRI fund managers should show flexibility and invest in companies with a good overall record for responsible behaviour in China, even though these do not comply with international labour standards. This would ‘encourage the dissemination of good practice’ in China.

However, those with the best record on human rights are still generally owned by foreign multinationals, says the study.

The investment policy of the bank’s Oekovision Fund excludes companies with more than five per cent of their workforce in China, but makes an exception for those able to show evidence that they broadly adhere to minimum labour standards. ABB, B&Q, Canon, IBM and Kyocera are among its holdings.

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