Firing an under aged 14-year-old worker may throw her entire family back into poverty
Can you have transparent accounting for all companies if the tax regime is corrupt?
What if demanding factory improvements beyond its peer group or national standards to meet ADB / World Bank standards would make an investee less profitable?
If all of a business’s competitors are paying below market rates for labor, should an investee pay more and not be competitive?
But the risks of not doing anything are greater . . .
Without assessments, non-financial risks cascade . . .
Child workers discovered in investee company factory! The immediate impact to the Fund:
The investee company loses supply contract with major US buyer and cashflow & profits collapse
The investee company is fined, loses business license
Outstanding loans are called, security realized
The fund writes down its investment
The Fund manager and lenders suffer reputation damage and are probably in breach of their fiduciary responsibilities and
Are called to account, perhaps dismissed or even sued for negligence
The unfortunate results . . . Nike/Wal-Mart Loan Book Own Pension Fund Treasury Wealth Management Institution Deposit- taking Insurance subsidiary Private Equity Guarantee Issuance
Conclusion: an integrated approach to due diligence facilitates risk mitigation and can lead to better financial results for the company and investors Workplace Health & Safety Environmental Management Productivity & Management Systems Financial Management Labor Governance & Controls