Unilever, owner of Ben & Jerry’s and Dove, promises every worker 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 farm businesses, purchasing director David Ingram told CNN Business. Unilever (the) is one of the largest consumer goods companies in the world 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 ($ 2.4 billion) per year by 2025 with vendors owned and operated by people from under-represented groups, including women and blacks, against 300 million euros ($ 363 million) currently.
“The two biggest threats facing the world today are climate change and social inequalities. The past year has undoubtedly widened the social divide, ”said CEO Alan Jope.
The coronavirus pandemic has worsened global inequalities and is expected 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 risks widening the gap.
This will only increase pressure from activists and consumers alike for businesses to tackle inequality. Several clothing retailers, including H&M (HNNMY) and Asos (ASOMIA), are committed to paying a living wage in their clothing supply chains. And large German supermarket chains, including Aldi and Lidl, signed a voluntary agreement last year to promote living wages in their supply chains.

But 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 allow workers to break the cycle of poverty. “It enables people to afford a decent standard of living, covering the basic needs of a family: food, water, shelter, education, health care, transportation, clothing; and includes provision for unforeseen events.” , he added.

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

Countries in Africa and South America, as well as others that supply Unilever with essential products, such as India, Malaysia and Indonesia, will be prioritized.

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 engagement is a “very positive step” from a leading company that could set an example for other companies.

“It is important that this be done transparently [and] the living income and living income goals they set for themselves in different parts of the world are independently determined … and this is not something Unilever sets for itself or influences in any way ” , they told CNN Business.

Unilever currently requires its suppliers to pay a statutory minimum wage. Ingram said he will work with NGOs, suppliers, other companies and governments with the aim of establishing living wages for the countries where he operates.

“The heart of what we are trying to do is to bring about systemic change [and] broad enough that ideally sectors and governments institute living wages as a natural basis, ”said Ingram.

The cost of a living wage

Living wages are often considerably higher than the minimum wage, which can be extremely low in poorer countries. In Côte d’Ivoire, where Unilever sources 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 squeezed by its commitment to a living wage, Ingram said there would be a cost to the company and its suppliers, but it would be “sucked into the chain. of value ”and, in some cases, covered by helping more productive.

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

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

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

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