Wesfarmers puts safety first for overseas workers

In light of the tragic building collapse that occurred in Bangladesh in April leaving over 1,000 factory workers dead, Target and Kmart, owned by conglomerate Wesfarmers (ASX: WES) have signed up to an accord on fire and safety which commits them “to the goal of a safe and sustainable Bangladeshi Ready-Made Garment industry.”

It is certainly positive seeing a major corporation like Wesfarmers leading the way on this serious issue. No doubt Wesfarmers’ decision will put pressure on rival Woolworths (ASX: WOW), owner of the Big W chain, to follow suit and give assurances to its customers about the safe origins of its merchandise as well.

Companies will increasingly have to justify to customers that the goods they sell are being produced in a humane, ethical and safe way. This will particularly affect companies such as Kmart, Target, Big W and Premier Investments (ASX: PMV) which directly source their goods from factories in countries such as Bangladesh. Direct sourcing companies are more at risk of being held accountable for practices within factories than stores which are primarily re-sellers such as David Jones (ASX: DJS) and Myer (ASX: MYR).

Foolish takeaway

Compared to last century, globalisation and mass media have made the world a small place where companies cannot shirk their responsibilities without being caught out before too long. That’s certainly not a bad thing but it does increase the risk for investors if management does not act with the highest of integrity.

In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

Motley Fool contributor Tim McArthur has no financial interest in any company mentioned in this article.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked…

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of The Motley Fool’s Top 3 Blue Chip Stocks for 2019.

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in a specially prepared FREE report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

See the 3 blue chip stocks

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.