UK online fast fashion retailer Boohoo Group says its board is looking into whether it can link senior executive remuneration incentives to Environmental Social and Governance (ESG) improvements.
The government’s Environmental Audit Committee (EAC) first made the recommendation following an evidence session in December as part of its wider investigation into the impact of fast fashion. The meeting was attended virtually by co-founder and executive chairman of the Boohoo Group, Mahmud Kamani, and executives.
Kamani was urged by EAC chairman Philip Dunne MP in March to provide an update on some of the commitments he made to politicians during the session – including whether executive bonuses will be linked to progress on workers’ rights and sustainability.
The EAC believes such a move would demonstrate a genuine commitment to environmental and social responsibility.
In his response, Kamani says he can confirm the recommendation is being considered by the group’s board.
“Our Remuneration Committee is looking at the details of how this might work in practice and have engaged specialist consultants to help us with this. Our annual Remuneration Report will be published in May and will include a further update on this matter.”
He adds Boohoo’s teams are working intensively to deliver sustainable change, strengthening the group’s supply chain governance and internal processes.
“I sincerely believe that these efforts will have a positive impact, not just on our own suppliers, but on standards across garment manufacturing in the UK as a whole. We want to support Leicester in becoming a destination of choice for retailers who have previously chosen to relocate sourcing from the city. This would stimulate investment in the garment industry, further raising standards and benefiting the wider economy with good quality jobs being created at a crucial time.”
Kamani also restates his invitation to Dunne and the EAC to visit Boohoo’s new manufacturing facility in Leicester once it is open, currently scheduled for this autumn.
Dunne says Boohoo’s response to the EAC’s letter “sends promising signals that we are reaching a turning point in fast fashion’s awareness of its environmental and social responsibilities.”
He adds: “It is welcome news that the board is considering aligning senior executive bonuses with making ESG improvements, and I look forward to hearing whether this is being taken forward.
“Bonuses shouldn’t just be linked to breakneck growth. Boohoo needs to demonstrate that it is delivering verifiable improvements in workers’ rights and the climate impact of its products.
“News last summer emanating from Leicester’s garment industry appalled us all, with allegations of modern slavery in supply chains and a lack of covid secure measures in factories.
“This spotlight on Leicester may have encouraged Boohoo to take steps to clean up its supply chain.
“Once the publicity dies down, I hope these changes remain in place for years to come with a renewed pride in ‘Made in Britain’ items and certainty on improved workers’ rights.”
The EAC will hold another evidence session on Wednesday (28 April) as part of its Fixing Fashion inquiry follow-up to examine the new Textiles 2030 voluntary industry initiative that launches today (26 April).