On Monday, H&M introduced its newstrategy to pay all 850,000 garment workers a 'fair living wage' by 2018 during the first conference on Living Wage in International Supply Chains in Berlin. The Ministry of Foreign Affairs of the Netherlands and the German Federal Ministry for Economic Cooperation and Development were the driving factors behind this key initiative.
Global Head of Sustainability at H&M, Helena Helmeon, was the main speaker at the conference. Over the past year, H&M worked on a new strategy to focus on improving wages, both short and long term. The plan includes addressing a number of sectors from H&M's purchasing practices, supplier practices, workers' rights and local government responsibility.
H&M stated on its website that the company always believed that “wage development in production countries, which is often driven by governments, is taking too long,” and that as an apparel company, H&M has the power to “contribute to a positive change.”
H&M can help bring around a "positive change" to wage development
The Swedish apparel company currently purchases the majority of its garments from textile factories in Asia, including Bangladesh, where a number of strikes and riots have been taking place demanding higher wages for garment workers ever since the collapse of the Rana Plaza factory in April. Although H&M did not purchase from the factory, it was among the first retail companies to sign the Bangladesh Safety Accord for fire and building safety in garment and textile factories.
H&M has updates its Code of Conduct to include its new strategy and has agreed to support factory owners to establish pay plans that will introduce “fair living wages” in two factories in Bangladesh and one in Cambodia in 2014. Then the company plans to roll out the strategy to all 750 garment factories that H&M sources from by 2018. H&M plans to asses the wage progress by introducing monthly evaluations and wages to be improved within a year.
The implantation of “fair living wages” is an investment into H&M's customer offering, added the company. H&M revealed that giving garment workers higher living wages should not have a “negative impact on the price of products” and should only benefit the company long term. “We are willing to pay more so that the supplier can pay higher wages,” concluded H&M.
"H&M's initiative to create a wage policy for the suppliers in their production countries is an important step to resolve one of the major problems in the textile and clothing industry; how to find models for decisions on fair living wages and stable conditions in the labour market,” said Brengt Johansson, CSR ambassador at Swedish Ministry for Foreign Affairs on the company website.