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A garment maker weighs a safety and labour upgrade
The prompt
A fictional garment maker in Vietnam has revenue of USD 50 million a year. Its largest customer is a European brand covered by the CSDDD. It takes 40 percent of sales and earns the maker a 10 percent margin on them. The brand will keep buying only if the maker upgrades fire and building safety (USD 3 million once). The maker must also add audits, overtime limits and higher wages (USD 0.8 million a year). The maker also has a USD 30 million sustainability-linked loan. Its interest margin falls by 0.10 percentage points if it meets the same standards (illustrative numbers). Should it invest?
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