Unilever, owner of Ben & Jerry’s and Dove, promises all workers in its global supply chain a living wage

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The living wage initiative will extend to 65,000 direct suppliers and several thousand agricultural businesses, David Ingram, chief purchasing officer, told CNN Business. Unilever (the) is 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, the owner of Ben & Jerry’s and Dove also pledged to spend 2 billion euros ($ 2.4 billion) annually in 2025 with suppliers owned and managed by people from under-represented groups, including women and blacks, above 300 million euros ($ 363 million) ) current.
“The two biggest threats currently facing the world are climate change and social inequality. Last year has certainly widened the social gap,” said CEO Alan Jope.
The coronavirus pandemic has exacerbated global inequality and extreme poverty (defined as living on less than $ 1.90 a day) is expected to increase for the first time in more than two decades, according to the World Bank. Unequal access to vaccines between rich and poor countries runs the risk of worsening the divide.
This will only increase the pressure of activists and consumers for companies to deal with inequality. Various clothing retailers included H&M (HNNMY) i Asos (ASOMY), have pledged to pay wages to garment supply chains. And major German supermarket chains, including Aldi and Lidl, signed a voluntary agreement last year to promote living wages in their supply chains.

But few companies they have the worldwide reach of Unilever. The consumer goods giant sells more than 400 brands in 190 countries and its products are used by 2.5 billion people.

Unilever said a living wage should allow workers to break the cycle of poverty. “It allows people to pay for a decent standard of living, which covers a family’s basic needs: food, water, housing, education, health, transportation, clothing; and includes a provision for unexpected events,” he added.

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

Priority 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 Anker, partners of the Global Living Wage Coalition and creators of the Anker methodology for estimating a living wage, said Unilever’s commitment is a “very positive step” from a leading company that could lead by example. companies.

“It is important that it is done with complete transparency [and] salary targets and vital incomes set in different parts of the world are determined independently … and not something that Unilever sets or influences in any way, ”they told CNN Business.

Unilever currently requires its suppliers to pay legal minimum wages. Ingram said he will work with NGOs, suppliers, other companies and governments in an effort to establish living wages for the countries where he operates.

“The core of what we are trying to do is make a systemic change [and] broad enough for sectors and governments to ideally institute the living wage as a natural basis, ”Ingram said.

The cost of a living wage

Living wages are usually considerably higher than the minimum wages, which can be extremely low in the poorest countries. In Côte d’Ivoire, where Unilever supplies cocoa beans for its Magnum ice cream, the rural living wage for 2020 was 68% higher than the national minimum wage, according to a report by the Global Living Wage Coalition.

Asked whether Unilever’s margins would be reduced by its commitment to a living wage, Ingram said there would be a cost to the company and its suppliers, but that it would be “absorbed by the value chain” and, in some cases, covered helping suppliers to be more productive.

For example, developing sustainable farming systems in poor countries could increase crop yields and increase farmers ’incomes. “We’re not exactly sure what that gap and cost will be, but what we’re sure of is that the consumer won’t end up paying more,” he added.

But Fairtrade International said the price should be an “integral part of any wage commitment” to avoid negative impacts on producers and their workforce. “There is a correlation, for example, between very low wages on tea farms and consumer prices,” Wilbert Flinterman, a senior adviser on workers ’rights and union relations, told CNN Business.

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

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