Track: Industry Solutions

Abstract

As stakeholders increasingly demand products produced socially and environmentally responsible, Multi-National Corporations (MNCs) have since 1990 more and more joined Global Corporate Responsibility (GCR) frameworks showing an increased awareness of MNCs about the need for sustainable forms of production in their supply chains. Uniqlo is one of the global fashion brands committed to global GCR standards. It will look for suppliers that operate in an environmentally responsible manner. In total, fourteen first tier and nine second-tier suppliers of Uniqlo are Indonesian companies. In this paper, we have examined the participation of Uniqlo’s Indonesian second-tier supplying factories in PROPER, the environmental management rating program of the Indonesian Ministry of Environment. Our research shows that since 2015, Uniqlo’s 2nd tier suppliers increasingly participate in PROPER – starting from 2021, all Uniqlo’s Indonesian 2nd tier suppliers participate in PROPER. We conclude that this increased participation in PROPER may indicate increased pressure on supplier companies from MNCs such as Uniqlo to demonstrate environmentally responsible management. To anticipate a growing demand for environmentally responsible production, we recommended that the Indonesian government expands the PROPER program to include companies with a less expected/potential environmental impact, such as sewing factories, or develop a similar program for such companies so that these companies can demonstrate compliance with international GCR standards of production and management.

Keyword

Global corporate responsibility, environmental responsibility, Japanese companies, supply chain