Unilever, owner of Ben & Jerry’s and Dove, pledges a living wage to every employee in its global supply chain

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The living wage initiative will extend to 65,000 direct suppliers and several thousand farms, purchasing chief David Ingram 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 the website.
In a statement the owner of Ben & Jerry’s and Dove Also pledged to spend € 2 billion ($ 2.4 billion) annually by 2025 with suppliers owned and operated by people from underrepresented groups, including women and blacks, an increase of € 300 million ($ 363 million) currently.
“The two biggest threats facing the world today are climate change and social inequality. The past year has undoubtedly widened the social divide,” said CEO Alan Jope.
The coronavirus pandemic has exacerbated global inequality and is projected to increase extreme poverty – defined as living on less than $ 1.90 a day – for the first time in more than two decades, according to the World Bank. Unequal access to vaccines between rich and poor countries threatens to widen the gap.
That will only add to the pressure from activists and consumers for companies to tackle inequality. Several clothing stores, including H&M (HNNMY) and Asos (ASOMY), have committed to paying a living wage in their clothing 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.

Few companies have Unilever’s 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 a living wage should enable workers to break the cycle of poverty. “It enables people to afford a decent standard of living and provides for a family’s basic needs: food, water, housing, education, health care, transportation, clothing; and provision for unexpected events,” he added to.

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

Countries in Africa and South America, and others that supply Unilever with important raw materials, such as India, Malaysia and Indonesia, will be prioritized.

Martha and Richard Anker, partners in 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 set an example for other companies. .

“It is important that this is done in full transparency [and] the living wage and income targets they set in different parts of the world are set independently… and not something Unilever imposes or influences on itself in any way, ”they told CNN Business.

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

“At the heart of what we’re trying to do is make a change that is systemic [and] so broad that ideally industries and governments introduce living wages as a natural basis, ”said Ingram.

The costs of a living wage

A living wage is often significantly higher than the minimum wage, which can be extremely low in poorer countries. In Ivory Coast, where Unilever buys 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.

When asked if Unilever’s margins would be squeezed by its commitment to a living wage, Ingram said there would be costs to the company and its suppliers, but these would ‘go down the value chain’ and in some cases become covered by helping suppliers. more productive.

For example, developing sustainable farming systems in poor countries could increase crop yields and increase farmers’ income. “We don’t know exactly what that gap and cost will be, but we are sure consumers will not pay more,” he added.

But Fairtrade International said price should be an “integral part of any living wage pledge” to avoid negative consequences for producers and their workers. “For example, there is a link between very low wages in tea plantations and consumer prices,” said Wilbert Flinterman, senior adviser on workers’ rights and union relations.

“Completely closing the living wage gap will depend on commitment and collaboration between different actors in the supply chain – from manufacturers to traders and retailers,” he said.

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