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A basis for research and practical guidance focusing on federal securities laws, compliance & corporate governance.

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An educational service that provides practical guidance on legal issues involving public and private mergers & acquisitions, joint ventures, private equity – and much more.

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CompensationStandards.com

The “one stop” resource for information about responsible executive compensation practices & disclosure.

Section16.net

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PracticalESG

PracticalESG.com

Keeping you in-the-know on environmental, social and governance developments

When the term supply chain became mainstream in the 2000s, some criticized it for implying that companies and their suppliers were linked in a “clean” linear manner, when in reality it is more like a “supply web.” That may seem pedantic, but the idea is important because it indicates companies face more risks/exposures than we might realize. Here is an example:

The BBC published an article claiming that fast fashion companies bear responsibility for heat-related stress and death of workers at a Cambodian brick maker. The connection between garments and bricks isn’t intuitive; however, the BBC claims the brick factory is “where people toil in some of the hottest working conditions in the world, fuelled in part by the scraps of fast fashion.”

“Most Western fashion labels have strict codes of conduct to stop [the use of fabric waste as an industrial fuel source] from happening. A Disney spokesperson told the BBC that the company was investigating the claim and that it ‘did not condone the conditions alleged in this situation’…

H&M acknowledged that traceability is still an issue in Cambodia but said they did have their own waste management guidelines to ensure that fabric waste isn’t used as a fuel source by factories, or sent to a landfill.”

Although this was new to me, the connection between garment manufacturers and use of fabric waste as an industrial fuel has been known at least as far back as 2018, when the report Blood Bricks was published by Royal Holloway, University of London. I do remember claims a few years ago about fishmeal (used to feed shrimp sold to US retailers) from Thailand that was allegedly produced using slave labor.

Especially when it comes to social and environmental issues, don’t be limited by linear thinking about supply chains or expectations that all parties totally abide by your company’s policies. It’s a tangled web.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile