Are your shoes made with forced labor?

forced laborAre your shoes being made with forced labor? That’s what we want to find out by asking apparel and footwear maker Skechers to adopt a human rights policy and figure out exactly where it’s sourcing materials.

Across the world, an estimated 25 million people are victims of forced labor. The majority of them are exploited by companies for a profit rather than by private individuals. One of the largest sectors that relies on forced labor is the $3 trillion apparel and footwear industry. An estimated 60 million to 75 million people are employed in this global sector.

A new player in the forced labor game is China, which has begun using detained Uighur Muslims for forced labor to make textiles. It’s gotten so bad that U.S. Customs and Border Protection began blocking shipments from there starting in October 2019. The U.S. government’s action—the first against a Chinese exporter in the context of the burgeoning forced labor crisis in China’s Xinjiang Province—comes against the backdrop of a catastrophic and ever-worsening human rights situation for the Uighur ethnic minority.

That’s where Skechers comes in; Skechers has one of the worst track records in the industry when it comes to keeping tabs on its suppliers.

The 2019 Corporate Human Rights Benchmark gave Skechers an overall score of 10.8 out of 100, and KnowTheChain’s 2018 Benchmarking Report on Forced Labor in the Apparel and Footwear Sector gave the company an overall score of 7 out of 100.

When you don’t know what’s in your supply chains, you can easily allow the kind of products made by forced labor in Xinjiang into your warehouses. We’re concerned about this as investors in Skechers. We want to know what they’re doing to make sure they don’t buy materials made with forced labor.

They can and should do better. That’s why we filed a human rights policy shareholder proposal in conjunction with the Socially Responsible Investment Coalition, to be voted on at Skechers’ 2020 annual meeting of stockholders.

We hope this will be a positive step in keeping Skechers honest and compelling them to reassess their weak supply chain controls. For responsible investors concerned about the impact of their investments on both people and the planet, it’s an important part of active stock ownership.

This is a developing situation, and we hope to have good news to report to you in the coming weeks and months. Be sure to check our shareholder advocacy page to follow all our corporate engagements.

Azzad Asset Management

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