In 2016, China Labor Watch, a New York-based non-governmental organization, released a report alleging mistreatment of employees at two factories that produce toys for The Walt Disney Company and other brands.
The report, based on observations of a China Labor Watch investigator who went undercover as a production line worker, said wages were low, overtime was compulsory, living conditions in worker living quarters were poor and employees were exposed to toxic chemicals without safety training or sufficient protection.
Engagement
Vancity Investment Management is committed to keeping companies accountable when they outsource production to countries with mixed records of respecting human rights. After reviewing the China Labor Watch report, we called on Disney to conduct a careful examination of working conditions at both factories. Our goal was to encourage Disney to take any corrective action needed to ensure that both factories fully complied with Disney’s supplier code of conduct.
How does “engagement” work?
Through engagement, we utilize our rights as shareholders to communicate with company management on environmental, social and governance matters that are significant to our clients.
Outcome
Disney’s investigation confirmed that both facilities were not meeting their obligations. The investigation also revealed that goods were being produced for Disney by an unauthorized manufacturer. To address the first problem, Disney set a timeline for both factories to bring their practices into line with the supplier code of conduct. To deal with the second issue, Disney required its vendors and licensees to stop production through the unauthorized manufacturer.