H&M Makes Commitment to Pay a Fair Living Wage By 2018

Hundreds of garment workers in Bangladesh took to the streets last week to demand a higher monthly salary. Fast forward a week, and now the world’s second largest clothing retailer, Hennes & Mauritz, best known as H&M, has made a commitment to pay a “fair living wage” by 2018. The announcement came on November 25 at a conference in Berlin titled Living Wage in International Supply Chains. Helena Helmersson, Global Head of Sustainability at H&M, was the keynote speaker at the conference. Helmersson made the commitment during the conference

It has always been our vision that all textile workers should be able to live on their wage,” the company said in a statement. “That is also stated in our Code of Conduct. We believe that the wage development, driven by, for example, governments in some countries, is taking too long, so we want to take further action and encourage the whole industry to follow. With size comes responsibility and we have the ability to contribute to change.”

The living wage commitment is part of the company’s roadmap on “how to address wages the best way” which it has been working on for the past year. The roadmap addresses both short and long-term wages and covers everything from purchasing practices, supplier practices, workers’ rights and government responsibility. H&M will implement a Fair Wage Method in its “role model factories” from which it will source “100 percent of the products” during the five years it will take to implement the method. By 2014, the company will implement the Fair Wage Method in three model factories, one in Cambodia and two in Bangladesh. The first evaluation will occur next summer. Results of the company’s progress will be reported in its annual Conscious Actions Sustainability Report.

H&M also expects its “strategic” suppliers to have pay structures in place to pay a living wage by 2018, which will reach about 850,000 textile workers. The company’s strategic suppliers are currently 750 factories which produce around 60 percent of its products. Starting in 2014, the company will be doing the following:

• Developing a “price method to ensure the true cost of labor”
• Improving its purchasing plans so that suppliers’ production peaks are reduced and they are enabled to better prepare the correct capacity in their factories
• Updating its Code of Conduct to better reflect its roadmap and goals
• Expand its social dialogue project so that 15 percent of its suppliers are trained in social dialogue and have freely elected Workers Participants Committees, with the goal of reaching 100 percent by 2018

H&M will run vocational training, called a Center of Excellence, where 5,000 students will be trained by 2016. The clothing giant has already started a skill development training program which will “secure employment,” as stated in the roadmap, for 100 supervisors through its Production Management Program in Cambodia. It is currently implementing an industrial relation project in Cambodia which aims to “strengthen the structures for industrial relations in the country and increase collective bargaining.”

Stay tuned to see how H&M's commitment influences other clothing manufacturers.

Photo: Terry Chay