H&M rolled out a strategy in 2013 to ensure workers throughout its supply chain were getting a fair living wage

H&M rolled out a strategy in 2013 to ensure workers throughout its supply chain were getting a fair living wage

Swedish apparel retailer H&M has hosted a Fair Living Wage Summit in Cambodia to update brands, academics, trade unions and representatives on its progress towards achieving fair living wages for workers in global supply chains.

The meeting marked the end of a five-year strategy that began in 2013 to "create processes to make fair negotiations possible and find collaborations on industry level that would allow the whole industry to transform." 

Jenny Fagerlin, global social sustainability manager for the H&M group, says: "By collaborating with others who are just as committed to this crucial topic as we are, we're convinced that our industry can take big leaps forward." 

H&M says at factory level, the strategy "reached and exceeded" two time-bound goals presented in 2013: to empower garment workers by ensuring they are represented by democratically elected representatives; and to implement improved wage management systems to ensure that suppliers have transparent and fair systems in place and that garment workers are aware of how their wages are set and can be increased.

It adds that over the five years it improved its purchasing practices to avoid last-minute changes and ensure that labour costs are excluded from price negotiations with suppliers.

"This ensures that garment workers' wages are not negatively affected by price negotiations on products. We ask our suppliers through surveys how we can improve, and today 93% of our suppliers perceive us as a fair business partner."

Other efforts include collaborations such as the Action, Collaboration, Transformation (ACT) initiative, where 20 brands and global union IndustriAll work together to achieve industry-wide collective bargaining agreements supported by responsible purchasing practices.

"It's a true game-changer for the industry, bringing sustainable improvements for all garment workers – no matter which factory they work in or which brands they produce goods for. These agreements will be negotiated by those directly concerned – trade unions and employers – and will replace the minimum wage mechanism that has proven to be inadequate in raising wages to a living wage level.

"By signing ACT's Memorandum of Understanding on responsible purchasing practices, we commit to staying in countries that engage in a process of continuous wage growth through a collective bargaining agreement. We also promise to account for wage increases in our purchasing prices. Neither countries nor suppliers should face a risk of losing business or competitiveness due to wage increases.

"Even if we are already witnessing progress when it comes to wage levels, significant wage increases are entirely dependent on the work being done at individual factories is accompanied by industry solutions, such as industry-wide collective bargaining agreements. In this way, the ACT initiative marks a major turning point. This collaboration makes it possible to move beyond factory walls in order to change the ways wages are set for all garment workers within countries. ACT will make it possible and realistic to create a level playing field as well as enable big leaps forward when it comes to wages."

H&M says the average wage at supplier factories producing for the group is between 24% (Cambodia) to 93% (China) higher than the minimum wage level.

The wage level at the 500 factories that are improving their wage management systems is between 2% (Turkey) to 11% (Indonesia) higher than the factories not yet enrolled in these programmes.

"Our commitment to achieve progress towards fair living wages is stronger than ever. What we have learnt from our experiences, we will bring with us in our future work. Together with our partners, we will have the possibility to go beyond factory level and create systemic change for all garment workers across the industry," the group adds.

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