Target: Supporting black lives with supplier diversity
On May 29, 2020, after the disturbing video showing Minneapolis police officer Derek Chauvin kneeling on George Floyd’s neck hit the internet and caused civil unrest across the US, despite incurring damage and loss of property due to looting, Target issued a entitled “A Note From Brian Cornell to Our Teams and Communities in the Twin Cities and Beyond,” in which CEO Brian Cornell said:
“We are a community in pain. That pain is not unique to the Twin Cities—it extends across America. The murder of George Floyd has unleashed the pent-up pain of years, as have the killings of Ahmaud Arbery and Breonna Taylor. We say their names and hold a too-long list of others in our hearts. As a Target team, we’ve huddled, we’ve consoled, we’ve witnessed horrific scenes similar to what’s playing out now and wept that not enough is changing. And as a team we’ve vowed to face pain with purpose.
“Every day, our team wakes up ready to help all families—and on the hardest days we cling even more dearly to that purpose. As I write this, our merchant and distribution teams are preparing truckloads of first aid equipment and medicine, bottled water, baby formula, diapers and other essentials, to help ensure that no one within the areas of heaviest damage and demonstration is cut off from needed supplies.
“Our store and HR teams are working with all of our displaced team members, including the more than 200 team members from our Lake Street store in Minneapolis. We will make sure they have their full pay and benefits in the coming weeks, as well as access to other resources and opportunities within Target. We’ll continue to invest in this vibrant crossroads of the Seward, Longfellow, Phillips and Powderhorn communities, preserving jobs and economic opportunity by rebuilding and bringing back the store that has served as a community resource since 1976. In any of our other locations that are damaged or at risk, the safety and well-being of our team, guests and the surrounding community will continue to be our paramount priority.
“It’s hard to see now, but the day will come for healing—and our team will join our hearts, hands and resources in that journey. Even now, Target leaders are assembling community members, partners and local officials to help identify what more we can do together and what resources are required to help families, starting right here in Minnesota.
“Since we opened our doors, Target has operated with love and opportunity for all. And in that spirit, we commit to contributing to a city and community that will turn the pain we’re all experiencing into better days for everyone.”
Chairman and CEO
At a time when so many brands chose to remain silent rather than alienate customers, the note struck a chord, with some even calling it . Companies started following suit, realizing that silence was not going to be acceptable.
And the company continues to show us how it’s done.
Supporting black lives: Big words backed by real action
Continuing to take action, on Wednesday, the massive retailer announced it was committing to spend $2 billion with Black-owned business by 2025. The retailer with a conscious plans to work with over 500 Black-owned businesses to add products across different categories. The company will also increase its spend with Black-owned companies in areas such as marketing agencies, construction companies, facilities maintenance service providers and more.
Additionally, the company is looking to create new resources, including the aimed at further supporting Black-owned startups by dedicating a team to help scale operations. “Target Forward Founders gives early-stage entrepreneurs the access, education, resources and flexibility they need to elevate to the next level.”
"We have a rich history of working with diverse businesses, but there's more we can do to spark change across the retail industry, support the Black community and ensure Black guests feel welcomed and represented when they shop at Target," said Christina Hennington, executive vice president and chief growth officer, Target. "The bold actions we're announcing today reflect Target's ongoing commitment to advance racial equity for the Black community. They also represent significant economic opportunity for hundreds of new Black-owned companies, who we look forward to doing business with for years to come."
Germany Adopts Revolutionary Supply Chain Human Rights Laws
While the title states that Germany’s newly adopted that targets human rights abuse across global supply chains is “revolutionary” ─ which it is ─, it certainly shouldn’t be. But nonetheless, today, on June 11th, 2021, the German Parliament has ushered in a long-awaited shift to mandatory company compliance rules. After months of negotiation, the German lawmakers finally pushed it over the finish line within the final days of the current legislative period. The bill will see German multinational corporations held legally responsible for any human rights or environmental abuses found across their global supply chains.
“The German government has taken a critical step to ensure that companies operate responsibly,” said Juliane Kippenberg, associate director, children's rights division, at Human Rights Watch. “Respect for human rights in global supply chains is not something that should be optional.”
This news comes at a time when global corporations are already being pushed towards environmental, social and governance (ESG) compliance, with a massive drive to reduce Scope 1, 2, and 3 carbon emissions from their supply chain operations and a concerted effort to avoid suppliers and manufacturers that do not meet the standards that industry-leading companies are now expected to meet.
Who will the new law affect?
With Germany’s new legislation, organisations that fail to meet the rules and regulations could be forced to pay fines potentially equivalent to 2% of their annual global turnover. However, it isn’t applicable to all.
According to Reuters, under the act, companies above a certain size will be forced to establish set due diligence procedures that prevent the abuses; from 2023, only companies with more than 3,000 employees in Germany will be affected. From 2024, the rules will expand to companies with more than 1,000 employees.
Statistics from within the country suggest that the first stage of this regulation rollout will affect 900 companies, while the second stage will put 4,800 companies under the spotlight. The bill will also enable the government to temporarily exclude from public tenders companies that receive fines in excess of €175,000.
“Incalculable risks arise for companies,” said Joachim Lang, general manager at the Federation of German Industry. A word of warning from a respected leader, at a time when industry lobby groups and wholesale businesses fear that the new law increases bureaucracy and suggest that price rises may be inbound.
The Take of German Giants
After looking at the incoming legislation, Daimler AG, known more commonly as the automotive giant Mercedes-Benz, a company which, should there happen to be any ESG-compliance issues along its multinational supply chain, would pay a hefty fee, is welcoming of the push for change but hesitant about certain aspects of the bill.
“Daimler's position is: The respect for human rights is a central aspect of our sustainable business strategy. We, therefore, welcome the progress made on the Supply Chain Act. Although the regulations are very ambitious, the proposed legislation has a sound approach overall. It is based on internationally recognised human rights and on international agreements. And it gives companies more legal certainty in an area that has so far only been partially regulated.
Supply chains are not "chains" but rather exceedingly complex networks: Daimler alone has over 60,000 direct suppliers - and many more sub-suppliers. For this reason, we also consider the proposed risk-based gradual model to be sensible. The responsibility of the companies lies primarily in their own business area and with their direct suppliers. Companies must then take action in the deeper supply chain if there are concrete indications of human rights violations. Daimler AG already does that today.
Even though we support the proposed legislation in principle, we consider some aspects to be critical, e.g. the planned fines of up to 2% of the average annual turnover. Instead of threats of sanctions, we consider concrete measures, which companies must take in the event of deficits, to be more expedient. In addition, certain wordings are still vague and leave room for interpretation. Terms such as, e.g. "fair standard of living" should be phrased precisely in order to create legal certainty. Furthermore, documentation and reporting requirements should not lead to unnecessary bureaucracy and should be harmonised with existing rules. On the one hand, this does not help the people on the ground, and on the other hand, it puts a burden on the companies – and the implementation can pose substantial challenges for smaller companies in particular.”
This law is arguably one of the most important developments in the supply chain space so far this year. But it must be remembered that changes do not and will not happen at the push of a button and that democratic principles should be applied to the discussion prior to enshrining legislation into tablature. Environmental and human rights advocacy is a hike, not a brisk walk around the park ─ so, for German companies, it’s time to get their boots on the ground and start assessing their global, interconnected supply chain operations. And, hopefully, they’ll set a stellar example for the rest of us.