Garment & Footwear

The Garment and Footwear Sector is characterised by extensive supply chain operations, often in locations where workers face a lack of adequate social protections; this exposes brands and retailers to negative reputational impacts from allegations of egregious labour standards and human rights abuses faced by workers. According to the Universal Declaration of Human Rights, “everyone who works has the right to a just and favourable remuneration ensuring for themselves and their family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.” Yet, the International Labour Organisation (ILO) notes that, whilst 90% of Member States have minimum wage legislation, many still earn below a minimum wage or not enough to meet basic needs. According to the UN Guiding Principles (UNGPs), corporates have a responsibility to respect human rights. Understanding of and scrutiny over the negative impacts of business operations on people is increasing, particularly as it relates to an ability to afford a decent standard of living. Assessing the impact of low pay and acting to mitigate or remediate this risk is one way businesses can align with the UNGPs.

The Garment Working Group aims to utilise a bespoke assessment methodology, based around specific pillars covering the transparency of brand living wage policies, how they engage with stakeholder initiatives and worker unions, efforts to assess the impact of non-payment of living wages, the integration of assessment findings and how brands track the effectiveness of their programs to culminate in remedy for workers. Each year we review the public disclosures and hold meetings with our investee companies to evaluate the effectiveness of programs to enable living wages.

Through our assessments, we have seen that brands need to focus more on articulating the effectiveness of their living wage programs. There should be greater accountability on staff whose role it is to implement human rights programs, including living wage; they should be incentivised to act and be held accountable for any underperformance. We consider the role of multi-stakeholder initiatives and trade unions to be under-utilised, improved wages and effective remedy for workers is likely best achieved collaboratively. Further, we expect brands to be more vocal in their support for freedom of association and collective bargaining and seek to be proactive in communicating with and upskilling suppliers on these issues. For the year ahead, we hope to see more embedded responsible purchasing practices, with evidence that brand impact assessments feed through to costing models and supplier pricing negotiations. Finally, as important as living wage gap analysis is, we believe a worker-centric approach is just as important. Brands should talk directly to workers, including those in the supply chain, to understand job-satisfaction and other obstacles and provide appropriate grievance mechanisms so the worker voice can truly be heard.