Australia’s reliance on its established superannuation system, to support Australians in their retirement, is becoming more evident. Due to medical and public health advances, the average Australian is living for longer. As a result, superannuation members need their balances to last longer and are concerned with how well their fund is performing. At the same time, fund members are increasingly assessing the social impact of the companies of which they are invested. Australian Prudential Regulatory Authority (APRA) figures in the December 2017 quarter, show that almost half of all superannuation assets are invested in Australian and international shares, this means they yield substantive financial power through divestment and investment against large listed companies.1 Fund members, who are also consumers, having a growing place in shaping corporate decision-making through generating awareness, protest, criticism and through purchasing decisions.
What is the role of consumers versus corporations to ensure production workers are protected and supply chains have ethical processes?
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Consumers as a collective, are increasingly challenging the practices, policies and activities of morally-misguided companies. Maintaining a sense of corporate social responsibility can be important to preserving or improving a company’s reputation, due to the threat of ‘shaming’ and damaging brand identities. One of these efforts involves the decision for global brands, such as American clothing retailer GAP, to employ factory monitors who assess working conditions at supplier factories to ensure goods are produce ethically.2 In 2013, over one thousand workers were killed when the Rana Plaza factory complex collapsed due to structural failure.3 The building housed several garment factories and was occupied by over five-thousand workers. Are we able to contain the tragedy of this event, given our distanced position as consumers? What is our liability as knowledge-barers, as individuals who know what happened, what do we owe to vulnerable workers producing our clothing? As a result of the collapse, and accompanying controversy, retailers echoed loud promises to improve working conditions, although limited their actions to signing accords without legally-binding terms. In the aftermath of the Rana Plaza factory, it’s the responsibility of consumers to think of the consequences of their purchasing decisions, of corporations to provide safe working conditions and for governments to not turn a blind eye.
How did lobbying by environmental groups in Australia lead to the abandonment of a pulp mill from a major bank who financed it?
The ability of individuals to draw criticism to unfavourable corporate decisions is substantive. In 2008, ANZ withdrew from being a funding partner of Gunns pulp mill in Tasmania which it had financed in previous years which was contingent on a financial assessment of the viability of funding the mill, as well as a social and environmental impact assessment.4 Lobbying by environmental groups helped to draw attention to potential damage to local businesses such as fisheries, tourism and vineyards.
We are responsible as consumers
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If we carefully consider our buying decisions and make an effort to understand whether it’s being sourced ethically, whether we’re buying a sustainable product will have its own impact. This applies to other decisions such as how superannuation is invested. You have the ability to choose funds that have screens against reckless companies who are engaged in socially-harmful industries, such as tobacco and gambling. Good Super offers products that can help Australians choose what cause they want to impact by taking out negative companies and including positively-influencing companies.
Prompting companies to consider the extent of their corporate social responsibility is part of the effort. The next part is revising our own decision-making to favour companies that have good practices in terms of ethics and social impact.
Do Good, Your Way.
- APRA Quarterly Superannuation Statistics (2017). http://www.apra.gov.au/Super/Publications/Documents/1802-QSP-1712.pdf
- Closing the gap: Quality and standards in ethical supply chains (2010). http://www.tradeforum.org/Closing-the-Gap-Quality-and-Standards-in-Ethical-Supply-Chains/
- Rana Plaza: Bangladesh jails owner of factory building that collapsed in 2013 for corruption (2017). http://www.abc.net.au/news/2017-08-29/rana-plaza-owner-of-collapsed-bangladesh-building-jailed/8854240
- ANZ exit from pulp mill confirmed (2008). https://www.theage.com.au/articles/2008/05/27/1211654037422.html