Greensboro, N C, (BBN)-VF Corporation Wednesday announced a collaboration with the International Finance Corporation (IFC), a member of the World Bank Group, to provide up to $10 million in financing for building upgrades and fire and safety improvements in vendor factories in Bangladesh.
These funds are part of VF’s overall $17 million commitment to the health and safety of Bangladeshi garment workers, reports BUSINESS WIRE.
With this financial commitment, VF is providing a corporate guarantee for IFC remediation loans to VF suppliers.
The program will enable the IFC to award loans at a reasonable cost to qualified suppliers who own factories in Bangladesh that produce VF products, helping to accelerate the implementation of needed fire and building safety improvements.
“The safety of the people making our products around the world is an imperative,” said Eric Wiseman, chairman, president and CEO of VF.
“Our program with IFC helps to ensure that our suppliers have access to the necessary capital to complete safety improvement plans,” he said.
Qualifying suppliers will have undergone structural, electrical and fire safety assessments under the protocol outlined by the Alliance for Bangladesh Worker Safety, of which VF is a member.
The funding will be used to implement corrective action plans derived from these assessments.
Individual loans granted to suppliers are expected to range from $100,000 to $1 million and must address one of three applicable performance standards: assessment and management of environmental and social risks and impacts; labor and working conditions; or, resource efficiency and pollution prevention.
“Employment in the apparel industry has reduced poverty for millions of women in Bangladesh,” said Serge Devieux, IFC Director for South Asia.
“This financing model, which we think could work well for other buyers and suppliers, will help Bangladesh’s suppliers improve work conditions and strengthen the country’s ability to attract garment manufacturers,” he said.
With the support of IFC, this program provides an innovative solution to facilitate indirect financing support from VF to help improve supplier factory safety.
IFC will utilize its in-house expertise on environmental and social standards to support the effort.
Additional information on VF’s other activities to protect the health and safety of Bangladeshi garment factory workers, independently and as a member of the Alliance for Bangladesh Worker Safety, can be found at wecare.vfc.com.