April 6, 2021 5:34PM ET

Kowtowing to China’s Threats Could Tank Fashion’s ESG Ratings

As tensions escalate over forced labor in Xinjiang, ESG experts warn that capitulating to Beijing can have moral as well as financial costs. — A photo shows a store of the clothing giant "H & M", which is facing with boycott movements all over China in Guangzhou, China on March 25, 2021. The boycott movements are spreading in response to the company's announcement that it will not use cotton from Xinjiang due to human rights violations in the Xinjiang Uygur Autonomous Region.

CREDIT: The Yomiuri Shimbun via AP Images

As tensions escalate over forced labor in the Xinjiang Uyghur Autonomous Region in northwestern China, environmental, social and governance (ESG) experts warn that capitulating to Beijing could have moral as well as financial implications for brands. Businesses that appear to exacerbate rather than improve the world‘s problems risk not only the disapprobation of their consumers…

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