Unilever, owner of Ben & Jerry’s and Dove, promises every worker in his global supply chain a living wage

Unilever, owner of Ben & Jerry’s and Dove, promises every worker in his global supply chain a living wage

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The living wage initiative will reach up to 65,000 direct suppliers and thousands of agricultural businesses, David Ingram, chief procurement officer, told CNN Business. Unilever (UL) is one of the world’s largest consumer product businesses and its supply chain contains more than 1.5 million farmers, according to its website.
In a statement, the owner of Ben & Jerry’s and Dove also promised to spend € 2 billion ($ 2.4 billion) annually on suppliers owned and managed by people from under-represented groups, including women and blacks, by € 25 million ($ 363 million) at present .
“The two biggest threats facing the world today are climate change and social inequality. In recent years, the social divide has undoubtedly widened,” said Alan Jope, chief executive.
The coronavirus pandemic has exacerbated global inequality and will, according to the World Bank, increase extreme poverty for the first time in more than two decades for the first time in more than two decades – defined as being less than $ 1.90 per day to live. Unequal access to vaccines between rich and poor countries could exacerbate the gap.
It will only increase the pressure of activists and consumers on companies to tackle inequality. Various clothing retailers, including H&M (HNNMY) and Asos (ASOMIE), committed to paying living wages in their clothing supply chains. And major German supermarket chains, including Aldi and Lidl, signed a voluntary agreement last year to promote live wages in their supply chains.

But few companies Unilever’s worldwide 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 that covers the basic needs of a family: food, water, housing, education, health care, transportation, clothing; and it provides for unexpected events,” he said.

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

Countries in Africa and South America, and others that supply Unilever with important commodities, 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’ by a leading company that can set an example set for other businesses.

‘It is important that this is done with full transparency [and] ‘the wage and life income targets they set in different parts of the world are determined independently … and not something that sets or affects Unilever in any way,’ ‘they told CNN Business.

Unilever currently requires its suppliers to pay legal minimum wages. Ingram said it would work with NGOs, suppliers, other businesses and governments in an effort to establish living wages for the countries in which it operates.

‘The core of what we are trying to do is a change that is systematic [and] wide enough to be ideal for sectors and governments to introduce living wages as a natural basis, ‘Ingram said.

The cost of a living wage

Living wages are often significantly higher than minimum wages, which can be very low in poorer countries. In Côte d’Ivoire, where Unilever acquires 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 if Unilever’s margins would be hampered by its commitment to a living wage, Ingram said it would mean a cost to the company and its suppliers, but would be “taken up in the value chain” and in some cases are covered by suppliers to help be more productive.

The development of sustainable agricultural systems in poor countries can, for example, increase crop yields and increase farmers’ incomes. “We are not exactly sure what the gap and cost will be, but what we are sure of is that the consumer will eventually not pay anymore,” he added.

But Fairtrade International said the price should be an “integral part of any living wage promise” to prevent negative consequences for producers and their workers. “For example, there is a correlation between very low wages in tea farmers and consumer prices,” Wilbert Flinterman, senior adviser on labor rights and union relations, told CNN Business.

“The delivery of the life – gap gap will depend entirely on commitment and cooperation between different actors in the supply chain – from producers to retailers and retailers,” he said.

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