By 2030, the staff of our top 10 suppliers will have a living wage.
Identify your top 10 suppliers, e.g. based on trading volume, sustainability risks and the probability of risks. Analyse the risks related to living wages and income (e.g. for smallholders) along your supply chain. Adapt your contracts with your most important suppliers and your Supplier Code of Conduct so that you require your direct suppliers to pay their staff a living wage and to pass this requirement on in the supply chain. Check the success of your efforts regularly.
In principle, the statutory minimum wage is paid (i.e. official minimum wage or wage according to collective agreement, whichever is higher). If this is not the case, you can set a timeframe for your suppliers by when the requirement must be met (e.g. 6 years). If you do not know the above values for guidance, work with Fairtrade organisations to calculate living wages and incomes or use the Anker method, for example.
The Anker method determines the amount of a living wage based on real costs in three areas: nutritious food, adequate accommodation and other costs, e.g.
for healthcare, education, clothing, transport and reserves for unexpected events.
If possible, you can also check whether you can reduce the complexity of your supply chain and purchase more products/services directly. Wherever you have identified relevant risks, establish direct contacts where possible.
Living wages are a key lever for addressing poverty and, in turn, enabling climate protection, biodiversity conservation and equal opportunities. The absence of living wages within supply chains not only contradicts the principles of many companies but also undermines efforts to create sustainable and responsible supply chains. As a growing number of companies are publicly demonstrating their commitment to living wages, investors and stakeholders are increasingly focussing their attention on this issue, which in turn increases the demands placed on companies.
