Living wages in the garment industry

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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


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