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January 25, 2019

Levi Strauss to pilot blockchain for factory worker welfare

By Beth Wright

Three factories in Mexico producing goods for denim giant Levi Strauss & Co are to become the first locations to use a new blockchain-based worker well-being system, which is being hailed as a “crucial first step” in a transparent evaluation of working conditions.

Announced today (25 January) at the World Economic Forum in Davos, Switzerland, Levi’s will partner with think-thank New America, blockchain software technology company ConsenSys, and Harvard TH Chan School of Public Health during a two-year collaboration to develop the blockchain-based system. It will be based on the school’s Sustainability and Health Initiative for NetPositive Enterprise (SHINE) Health and Well-being Index. 

Offering a secure and transparent way of sharing information – as opposed to the current network of proprietary systems – a blockchain is essentially a digital ledger. Anyone with permission to access the ledger can make changes and add information. These changes are called ‘blocks’ and they are added to the ‘chain’.

The new blockchain system represents an US$800,000 collaboration supported by the US State Department, the Levi Strauss Foundation, and ConsenSys. The grant was awarded to New America in 2018 by the US State Department with the aim of piloting a blockchain powered solution for a social innovation challenge. ConsenSys and the SHINE initiative are sub-grantees of New America.

The aim is for the system to be promoted as a universal benchmark to assess workforce well-being and the conditions that elevate it across industries. It will provide a workforce-wide view of factory conditions and individual health and well-being, and has been deemed a crucial first step in a transparent evaluation of working conditions.

To kick off the partnership, Levi’s will be the first company to leverage the technology and will roll out testing of a blockchain Worker Well-being (WWB) survey to three factories in Mexico, employing 5,000 workers.

The results will enable a more secure data collection, which will allow employees to answer more freely and therefore improve workforce well-being both at Levi’s and throughout other industries as the initiative expands.

“For the last 25 years, work in supply chains has been monitored mainly by audits,” says Dr Eileen McNeely, director of SHINE. “We know from research and serious traumatic events that this system alone is not effective. A distributed system of inquiry on the blockchain that goes right to the source [workers] offers a new solution.

“Most supply chain blockchain use cases are for material tracking, so leveraging this new technology for the evaluation of the human condition is an exciting innovation with broad potential for positive impact on worker well-being worldwide.”

In 1991 Levi Strauss & Co became the first multinational apparel company to implement global sourcing guidelines for its global supply chain; and in 2005, it was among the first apparel companies to release the names and locations of all active, approved owned-and-operated, contract, and licensee factories around the world. 

Today, its Well-being (WWB) programme aims to improve the lives of those who make its products around the world. To date, the initative has reached nearly 200,000 workers globally with factory-based programmes that seek to address issues related to health, financial security and gender equality. 

In a blog post Kim Almeida, director of worker well-being at the Levi Strauss Foundation, who oversees the survey, explains it will ask some “very personal questions,” not just about one’s health and family, but also about one’s direct managers and the overall workplace.

“Some people are wary of speaking out; they don’t know if there could be recriminations for what they say,” she explains. “For this reason, it’s critical that the survey results be anonymous, which is guaranteed in a blockchain platform.

“We expect that ensuring the anonymity of the results will give workers greater confidence to speak their minds, and thereby give researchers (and us) a better picture of conditions in these facilities.”

This grant is the first time the State Department has provided an opportunity for an organisation to leverage blockchain technology to track and measure worker well-being. By implementing the platform, Almeida says a SHINE survey will be able to be scaled quickly, beyond the Levi Strauss supply chain, which will allow Worker Well-being data to be analysed more broadly.

She adds: “One of the aspirations of Worker Well-being is to influence the apparel industry and make WWB the standard for the sector. We believe that the SHINE work, in partnership with Levi Strauss & Co, will provide an important tool that gets us one step closer to making this goal of scaling our approach a reality.”

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