PLWF sharing good practices on living wage
Interview with Andrea van der Kemp, Project & Supplier management at L. ten Cate
Dutch SME ten Cate has recently published a living wage gap analysis. This is a result of their first steps toward paying a living wage in production supply chains of their garments. Although it is not a publicly listed company, the PLWF chose to showcase the ten Cate example as a best practice, as the company is among the very few publicly reporting on the ‘living wage gap’ that they identified.
Transparency around wages
The Dutch IMVO Covenant for Garments advised ten Cate to start analyzing the gap between wages that are paid right now and living wage is in the supply chain. Andrea van der Kemp, Project & Supplier management at L. ten Cate: “We are a relative small company, and were not focused on living wage. However, for us it is important to start the process, to create more transparency and to start the dialogue on wages with our suppliers. We did so by identifying our largest supplier, where we have the most leverage.” For other suppliers, ten Cate has identified the gaps between minimum wages and living wages following their BSCI audit reports and started discussing the building blocks of the cost prize of the garments.
Van der Kemp: “A company has to know how their suppliers calculate their cost prizes; in that way you can determine where the prices need to increase to start paying better wages. One of the biggest obstacles in paying living wages is the transparency of the prices. To accomplish the necessary transparency, you need to have a good and trustworthy relationship with your suppliers, which we have.”
Van der Kemp is part of the Management Team of ten Cate and is responsible for CSR within the company. At ten Cate CSR is part of their day-to-day business and with a small team they make sure everyone is responsible within their own activities.
Closing the living wage gap
Ten Cate has an overview of all cost drivers of the prizes of their garments. Wages is one of them, and the company has created a step-by-step plan to improve the wages working towards living wages at all suppliers. This means that both ten Cate and suppliers will find a way of how to adapt these extra costs and in the end we are all here to create better circumstances for all parties.
One of the first targets is to decrease the wage gap of their biggest supplier from 46% to 29% in 2021, which is a very specific target, and the way ten Cate likes to set goals, clear and transparent.
Van der Kemp: “We are not aiming at hard purchasing practices, we have to work together with suppliers to reach the goals, open discussion is an important part of our improvements. We still have a long way to go and we still have to learn, but we want to do it in a transparent way. When talking about CSR, you are never finished, there is always something to improve and at the moment living wage is a big topic for us.”
The PLWF applauds ten Cate for starting its journey toward implementing living wage. Transparency on purchasing practices and investing in relationships with suppliers is key to understanding cost drivers. This is something ten Cate has learned. Their openness about what it takes to start addressing living wages in supply chains may help to inspire other brands to follow suit. While the journey to the implementation of lasting living wages may still bring further challenges, there is no reason to delay action.
Want to know more about what brands do to improve wages and incomes in their supply chains? Join the PLWF during our conference ‘Living Wage – Pushing Forward on Progress’ on October 28th. More information about the program and registration can be found here.