CASE STUDY
LIVING WAGE IN THE GARMENT INDUSTRY Payment of living wages can improve workers’ lives whilst having a positive business impact.
60
MILLION WORKERS USD
2.5 TRILLION
Collaboration This was a collaborative engagement together with the Platform Living Wage Financials (PLWF), representing EUR 4.8 trillion AuM.
An interwoven industry
Poverty pay
Business case
The global apparel industry is estimated to be worth USD 2.5 trillion and employs over 60 million workers globally. Its fragmented supply chain is exposed to laborrelated risks given its labor- and manual-intensive production process.
Workers in the garment sector are often subject to excessive overtime, sexual harassment, unsafe working conditions and poverty wages. Promoting a living wage would improve the livelihoods of workers and their families whilst building a more resilient industry.
Payment of living wages is a proxy to how a brand manages its global supply chain and minimizes reputational risks. This is materialized by the responsibility the company takes for direct and indirect employees.
Engagement In the period 2018-2021, Robeco engaged with 9 companies located in Europe, Asia, and North America.
Number of activities
Activity by contact point Executives 5% IR 37% ESG experts 44%
108
interactions with companies
Activity by contact type Email Conference call Open letter Shareholder resolution
39% 32% 16% 2%
Focus The engagement was structured around six key engagement objectives.
Examples of successes achieved CASE 1 One company committed to ACT’s Global Purchasing Practices, established targets towards the payment of living wages, and disclosed supplier wage data in its key sourcing countries. CASE 2 One company publicly disclosed their supplier list, which includes risk assessments to identify social and environmental risks in sourcing locations. CASE 3 Several companies began collecting wage data across their supply chain and benchmarked this against internationally recognized living wage estimates.
32 | ROBECO ENGAGEMENT 2022
Policy
Transparency
Stakeholder engagement
Purchasing practices
Remediation mechanisms
Monitor performance
56%
44%
22%
56%
22%
56%
Results During the three years, we successfully closed 56% of our engagement dialogues. Company Overall result Adidas Asics Corp. Burberry Group Gap Hanesbrands, Inc. Inditex Nike Philips-Van Heusen Corp. The Home Depot Positive progress Flat progress
Negative progress
Closed effectively
Closed non-effectively
In place prior engagement