Platform for Living Wage Financials’ five-year progress report states that work is needed on collaboration with unions and on the factual basis for action.
The challenge of moving towards a fair living wage is enormous, but some progress is underway, says Johanna Schmidt, Sustainability Researcher at Triodos, one of the founders of the Platform for Living Wage Financials (PLWF), an alliance of investors who deal with companies. on enabling living wages in global supply chains.
PLWF held an event in the Netherlands this week to celebrate its five-year anniversary and was released a report assessing the progress it has made together with the companies it invests in facilitating living wages and living incomes in their global supply chains.
Schmidt said the initiative had achieved success in establishing a strong network. “We are now a platform of twenty investors with €6.6 trillion under management. And what I am most happy with is the network. As investors, we really work together in knowledge sharing and discussions, but also with friends of the platform so that we get a lot of direct access to expertise.”
But Schmidt said there was still a long way to go before companies made tangible progress on fair living wages.
In its assessment report, PLWF found that while companies in the apparel and footwear sectors increased efforts to assess the impact of failure to pay living wages, recovery remains a key area for improvement and there is limited evidence of efforts to address effectiveness of these measures. living wage strategies.
Dialogue with trade unions
There is also a lack of emphasis among investee companies on the importance of trade union dialogue at supplier level. Schmidt said: “The distance between us, investors and employees on the ground, is very big, so we want to create a better dialogue and see evidence of that. This also applies to the unions.”
She noticed that this week Levi’s and H&M faced production stops in Bangladesh after thousands of workers went on strike and unions demanded higher wages. According to More Perfect Union, workers’ minimum wage is $75 per month or about $2 per day, and they are demanding that this be increased to $208. Because management only offers $90, more than 300 factories have closed so far.
“When brands say they respect freedom of association, that is central to the assessment [of companies], we have to see it on the ground too. And this dialogue with unions must extend to supply chains,” Schmidt said.
The assessment also found that in the clothing and footwear sector, 50% of companies demonstrated responsible sourcing practices, and that in both the food and agriculture sectors and food retailing, most companies committed to responsible sourcing practices, but only a few undertake to pay higher amounts. farm prices.
Schmidt said responsible purchasing practices include shielding labor costs – meaning they are insulated from negotiations between suppliers and companies – or developing long-term relationships with suppliers to help ensure fair wages.
PLWF has also developed optional engagement questions, which go beyond the current assessment framework regarding core expertise, power or budget allocations in the company and disclosure of data on metrics such as the number of employees at production sites and full transparency and traceability of the supply chain. .
The PLWF report was supported by Dr. Bärbel Kofler, Parliamentary Undersecretary of State and Governor of Germany, who said in his foreword: “Receiving a living wage for your work is a universal human right.” Noting that women and other marginalized groups are particularly affected by low wages and precarious work, Kofler called for a concerted effort from all stakeholders to ensure living wages.
Schmidt said cooperation on decent wages is crucial, in addition to pressure from different actors, including governments. “We have seen it in many ways, for example when the UN Special Rapporteur on Human Rights urged governments to enact a living wage law,” she said.