Unilever, owner of Ben & Jerrys & Dove, is promising a living wage to every worker in its global supply chain

The living wage initiative will span 65,000 direct suppliers and several thousand agribusinesses, Chief Purchasing Officer David Ingram told CNN Business. Unilever ()UL) One of the world’s largest consumer goods companies and its supply chain includes more than 1.5 million farmers, according to its website.
In a statement, Ben & Jerry’s owner and pigeon It also promised to spend € 300 million ($ 363 million) annually by 2025, with women and black people, including suppliers owned and managed by people from under-represented groups, with € 2 billion ($ 2.4 billion) annually.
CEO Alan Jop said, “The two biggest threats currently in the world are climate change and social inequality. The past year has undoubtedly increased the social divide.”
According to the World Bank, the coronovirus epidemic has worsened global inequality and is expected to increase extreme poverty, which is less than $ 1.90 per day. The unequal access to vaccines between rich countries and poor countries worsens the division.
This will only increase the pressure on consumers and consumers to deal with inequality. Many clothing retailers, including H&M ()HNNMY) And Asos ()ASOMY), Has committed to paying living wages in its apparel supply chains. Major German supermarket chains, including Aldi and Lidl, signed a voluntary agreement last year to boost living wages in their supply chains.

But some firms Unilever has a global reach. The consumer goods giant sells more than 400 brands in 190 countries and its products are used by 2.5 billion people.

Unilever said that a living wage should allow workers to break the cycle of poverty. He said, “It allows people to live a good standard of living to meet the basic needs of the family: including food, water, housing, education, health, transportation, clothing, and a provision for unforeseen events . ”

The commitment is part of the company’s sustainability goals, which include plans to dig fossil fuels into its laundry and cleaning brands and make all of its 70,000 products biodegradable over the next decade.

Preference will be given to countries in Africa and South America, and others that supply Unilever with key commodities such as India, Malaysia and Indonesia.

Martha and Richard Anchor, partners in the Global Living Wage Coalition, the creators of Anchor Methodology, to assess a living wage, said Unilever’s commitment is a “very positive step” by a leading company that could set an example for other firms .

“It is important that this is done with complete transparency [and] “The living wage and living income targets they are setting independently in different parts of the world… and nothing unilever affects themselves or in any way,” he told CNN Business.

Unilever is currently required to pay its suppliers a legal minimum wage. Ingram said it would work with non-governmental organizations, suppliers, other businesses and governments for the countries where it works.

“The core of what we’re trying to do is make a change that’s systemic [and] It is enough that the ideal sector and governments are doing wages as a natural basis, ”Ingram said.

Cost of living wage

Living wages are often much higher than the minimum wage, which may be much lower in poor countries. According to a report by the Global Living Wage Coalition, in Ivory Coast, where Unilever cocoa beans for its Magnum ice cream, rural living wages for 2020 were 68% higher than the national minimum wage.

Asked if Unilever’s margin would be squeezed by its commitment to living wages, Ingram said there would be a cost to the company and its suppliers but would “be absorbed into the value chain”, and in some cases help suppliers. Will be covered by More productive.

For example, developing a sustainable agricultural system in poor countries can boost crop yields and increase farmers’ incomes. “We are not sure exactly what this difference and cost will be but what we are making sure is that the consumer will not pay more,” he said.

But Fairtrade International said price must be “integral to any living wage pledge” to avoid negative effects on producers and their workforce. “There is a correlation, for example, between very low wages in tea estates and consumer prices,” Wilbert Flenterman, senior adviser on workers’ rights and trade union relations, told CNN Business.

“Closing the living wage gap entirely will depend on commitment and collaboration between different actors across the supply chain – from producers to traders and retailers,” he said.


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