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Social Sustainability

LIVING WAGE

Esprit feels strongly that the workers making our products should be able to live on the money they earn.

The topic of low wages has been controversial in the apparel industry for many years. The industry is highly fragmented, with multiple competing brands sharing factories, which are scattered across the globe, which makes calculating a living wage is a complex and intricate issue. The sharing of factories makes it difficult to bring about systemic change without cooperation among competitors in the industry, as well as with governments, unions, workers and factory owners. Reaching a consensus regarding the understanding of fair living wages presents one of the industry’s biggest challenges.

To overcome this challenge, Esprit joined with 16 other brands in signing a memorandum of understanding with IndustriALL Global Union to form Action, Collaboration and Transformation (ACT). ACT seeks to address the problem of low wages in the apparel industry by ensuring that workers have a voice in wage-setting through industry-wide, nation-wide collective bargaining agreements. Workers can seek higher wages within agreements that address a range of concerns about working conditions while preserving the competitiveness of their industry.

In addition to support for collective bargaining, ACT members commit to supporting productivity improvements, and to review our buying practices to ensure that our own actions support payment of a living wage. As an initial step, in June 2017 Esprit’s buying team took part in a pilot self-assessment study on buying practices. This pilot is the start of a larger process of reviewing on buying practices to identify what Esprit needs to change in order to help factory workers achieve a living wage.

Additional Work

Esprit believes that the approach taken by ACT is the right solution to raise wages in the apparel industry in the long term, but it is not enough. In October 2016, ASN Bank, a Dutch socially responsible investment bank, published a study of apparel companies and rated them according to their efforts in supporting living wages in their supply chain. Esprit ranked 6th out of 14 companies reviewed. The ASN Bank report included a number of concrete recommendations, which we have worked to implement. Changes we have made include the following:

• We updated our code of conduct to require suppliers to pay a living wage, rather than merely the legal minimum. Inserting language into the standards contained in the supplier agreements that our suppliers sign will not solve the problem by itself, but it provides a necessary basis for more work.
• Esprit has begun compiling wage data for the areas where our products are made. In addition to knowing the local minimum wage, we seek to understand how much workers actually earn and take home, as well as basic cost of living information in the areas where they live. Part of this data comes from the Fair Remuneration Scan that is part of BSCI audits.
• Once we have clear data in hand, we will seek specific steps that we can take to improve the situation.

A living wage is fundamental to worker rights, yet it is also one of the most complex challenges that we face in our supply chain. We set high standards for ourselves and have high values to which we feel strongly committed in order to change the situation of workers in supplier countries. There is still some way to go but we have started, and will continue feeling our way forward toward addressing this complex problem.

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