H&M’s response to our questions continued: “We have been working for the past five years, together with other brands, trade unions, the ILO and other partners, to create the necessary foundation for an improved wage setting mechanism; to strengthen workers voice; and to enable negotiation at factory as well as at industry level.
“Through the ground-breaking collaboration ACT, we aim towards industry-wide collective bargaining systems supported by brands committing to responsible purchasing practices. This is a way to create a level playing field and improvements for all garment workers, regardless of the factory they work in, and the brands they produce for.”
While NGOs such as Clean Clothes Campaign have repeatedly alleged H&M failed to meet its self-imposed living wage goals, the company told us: “We are proud of and fully committed to our work within this area. We reach more than 600 factories and 930,000 garment workers with our fair living wage strategy launched in 2013, meaning we have exceeded our very first milestone.“
Accountable accounting
The Fair Action report claims that “none of the banks [included in the study] are at the vanguard when it comes to living wages. Internationally, however, there is good practice available.” A statement which seems to offer optimism and realism in equal measure.
It is, however, also noted that “none of the banks with investments in H&M, KappAhl, Lindex or MQ have actively excluded a company due to labour rights violations in the supply chain. Neither has any of the banks done enough to push for living wages in their supply chains.” This demonstrates a lack of connectivity between investments and the companies they bankroll.
To get a bank’s perspective on this, we spoke with Eva Axelsson, Swedbank Robur’s head of sustainability. She explained how her department works alongside fashion brands and retailers in practice.
”Working conditions is one of the focus areas in Swedbank Roburs analysis of companies. Textile production is a particularly vulnerable sector where we follow developments closely. That is why it is important that our long–term work gives results,” Axelsson noted.
“Overall, we get top ranking for our active work with textile companies, which i.e. is done through close dialogue and follow ups, regarding terms of living wages, both weighted and broken down by company. An example of this is that we continuously have meetings with, for example H&M, about living wages.
“We are also one of the banks that the market says ‘goes the extra length’, which we see as a receipt that we are moving in the right direction and shoulder our responsibility as active owner and responsible investors. But of course there is always more to do, and we work continuously to further more contribute to a positive and sustainable change in textile production as well as the society as a whole.”
Of Fair Action’s recommendations, which do the organisation believe are the most likely to come to fruition, and how does this compare to the areas in need of the action most urgently?
“The banks should demand that H&M and other fashion brands share the costs of raising the wages with their suppliers,” Maria Sjödin concluded. “Brands can use extended or larger contracts as well as price premiums to factory owners with higher wages as an incentive for raising wages. We also encourage the banks to adopt an investment and lending policy that requires companies to ensure that workers in their supply chains are paid a living wage.”
Science-based targets, as have been the subject of ‘green finance’ campaigns in recent years, may well be very difficult to achieve, but are far easier to quantify than advances in workers’ rights and welfare. The one constant between environmental and social changes needed in the fashion sector is that banks have substantial leverage to improve both. It is now just a question of whether they will.
