Living Wage and Responsible Purchasing

As part of our commitment to respect human rights, we understand the importance of a fair wage to help protect human dignity and enhance quality of life. This is why we have committed to work with our partners to achieve a living wage for factory workers. A living wage is the minimum income necessary for a person to meet their basic needs as well as that of his/her family, including some discretionary income.

In 2015, as a first step in developing a long-term strategy, we launched a research project to better understand the challenges and opportunities associated with achieving a living wage for factory workers. A key finding was the importance of partnerships. Sustainable improvements in wages cannot be achieved by individual brands and retailers working alone – they require active industry collaboration and partnerships with employers, trade unions and governments.

Partnering for Change

As a result, in 2015 we joined 'Action, Collaboration, Transformation' (ACT), a collaboration between international brands and retailers, and IndustriALL Global Union, the international trade union federation. ACT aims to achieve a living wage in the garment and textile industry - in countries such as Bangladesh, Myanmar, Cambodia, Turkey and Vietnam - through freedom of association and industry-wide collective bargaining, supported by world class manufacturing standards and responsible purchasing practices.

Since joining ACT we have been working alongside its other members and with IndustriALL to assess our purchasing practices, and the industrial relations and competitive context in key sourcing countries. This assessment has helped identify the main factors impeding progress toward a living wage. These have informed ACT’s strategy and a package of change commitments which will form the basis of country consultations with employer representatives and trade unions (along with government representatives), who are ultimately responsible for negotiating an industry agreement at a national level.

ACT’s vision of industry-wide collective bargaining agreements and a living wage for garment and textile workers is a long-term journey with many challenges to overcome. But we are convinced this is the right path and the only sustainable solution. Industry-wide agreements will:

  • ensure that many workers benefit from higher wages, rather than a factory-by-factory approach; and
  • encourage employers to compete through innovation and quality, rather than low pay and conditions.

For brands and retailers such as Target, industry agreements not only provide a mechanism to fulfil our human rights commitment, but also greater certainty for investment; which is of benefit to our business, our supply partners and the workers who produce our products.

ACT Global Purchasing Practices Commitments

By December 2023, we will improve purchasing practices with our suppliers of our own brand apparel and footwear by implementing the ACT Global Purchasing Practices Standard.

In December 2018, ACT publicly released its Global Purchasing Practices Commitments. The commitments are the result of three years of review and consultations aimed at developing a common set of changes and implementation measures on purchasing practices that will support the movement towards living wages in the garment, textile and footwear industry. In addition to our support for freedom of association and industry-wide collective bargaining agreements, the implementation of the ACT Global Purchasing Practices Commitments is a key part of our role within ACT, working in partnership with other retailers and brand members, and IndustiaALL Global Union.

The commitments cover five broad areas:

  1. Brands commit that purchasing prices include negotiated wages as itemised costs;
  2. Brands commit to fair terms of payments;
  3. Brands commit to better planning and forecasting;
  4. Brands commit to undertake training on responsible sourcing and buying;
  5. Brands commit to practice responsible exit strategies.

For more information on ACT, visit actonlivingwages.com

In consultation other ACT brand members, our suppliers and IndustriALL, we are currently developing an implementation roadmap, key performance indicators (KPIs) and monitoring and reporting mechanisms, to ensure the successful realisation of the commitments in our business. We will provide further information on specific elements of our roadmap, timeline and progress when appropriate.

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