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Companies take action towards living wages

05/05/2021 – Sustainability / Living Wage / IDH / Trade Initiative / Unilever / Aldi

Companies take action towards living wages

IDH, The Sustainable Trade Initiative, has announced with global companies Aldi Nord, Aldi Sud, Eosta Fyffes, Fairphone, L’Oréal, Schijvens  Fyffes, Superunie, Taylors of, Harrogate, and Unilever to take action towards living wages. In a joint Call to Action, they call on other companies to do the same.  


In the Call to Action ‘Better Business through Better Wages’, companies from across the retail, food production and processing space – and beyond – express that the old business model looked to low wages as a profitability driver. In contrast, the new model “sees well-paid workers as an integral part of a profitable, sustainable and resilient business”, IDH said in a statement. 


A living wage provides workers and their families with a decent standard of living. “A living wage is enough to provide for their family’s basic needs for food, water, clothing, housing, education, transportation and healthcare,” the initiative clarified in the statement. 

“To eradicate poverty, a living wage is the first step. Helping workers achieve a living wage is a shared responsibility across the entire supply chain, but the business community must be a driving force,” stressed Daan Wensing, CEO of IDH, The Sustainable Trade Initiative. “We are proud that ten companies already will work together towards living wages and encourage other businesses to join the call to action and do the same.”

Inequality harms economic prosperity

“Pervasive social inequality harms prosperity of economies and societies,” IDH asserted, adding that the past year has undoubtedly widened the social divide. “Now businesses have an opportunity to change the way their business models operate to benefit wider society, breaking the cycle of poverty and strengthening the foundations of the global economy, while driving business growth,” it said.

Global FMCG giant Unilever, one of those progressive businesses leading the Call to Action, agrees: “We have committed that by 2030, everyone who directly provides goods and services to Unilever will earn at least a Living Wage or a Living Income. Because without a healthy society, there cannot be a healthy business,” said Marc Engel, Unilever’s Chief Supply Chain Officer. 


IDH Roadmap on Living Wages 

The IDH Roadmap on Living Wages develops and scales solutions for workers in the global supply chain for a living wage. The companies that joined the Call to Action will work with the Roadmap to develop and scale solutions for workers in global supply chains with the ultimate goal of a living wage.  


Specific actions include:  


1. Identifying living wage gaps in our their operations and supply chains, with a specific focus on the gender pay gap. 


2. Establishing shared frameworks with supply chain partners to close the gap, with concrete milestones.


3. Joining in multi-stakeholder partnerships that target areas with large living wage gaps. 


4. Building awareness and understanding among consumers of how they contribute to better livelihoods. 


5. Implementing practical solutions to remove barriers and close living wage gaps and share costs in an equitable way. 


6. Supporting freedom of association with robust social dialogue and wage setting mechanisms.


7. Adopting sustainable procurement and trading practices, including living wage requirements as part of commercial specifications, sourcing policies and/or contractual clauses/purchasing agreements. 


8. Ensuring that value created actually reaches workers. 


9. Transparently reporting on progress towards a living wage. 


10. Sharing learnings, challenges and solutions to inform and elevate all efforts in order to find new pathways for reaching living wages. 


Working together across stakeholders

“Achieving a more sustainable, equitable approach to business will require creative approaches from all stakeholders, including government, civil society, trade unions, investors and more, to remove barriers,” noted IDH. 

Such barriers are also listed in the Call to Action, which can be read here

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