Report by Rafa Salti
Credit: The Industry We Want
Fashion Declares attended a webinar on February 14th titled “Towards Industry Transformation: Tracking Progress on Wages, Purchasing Practices, and GHG Emissions Commitments Through The Industry We Want Dashboard”, presented by The Industry We Want, a multi-stakeholder initiative facilitated by Fair Wear, Ethical Trading Initiative and theSustainable Apparel Coalition.
Karen Diaz, Project Manager at TIWW started the webinar by emphasizing the need to accelerate change to environmental, social, and commercial practices in the garment and footwear industry. She described the sector as fragmented, and its progress slow and stagnated, she then gave a background on the targets and long-term goals of TIWW and the benefits of partnerships, data, and industry wide consultations to move towards these targets.
The Industry We Want dashboard
TIWW launched their industry metrics dashboard in 2022 focusing on three core metrics: Wages, Purchase Practices, and GHG Emissions. The webinar shared the updated metrics on the industry dashboard. Karen Diaz identified the role of the dashboard as being a public accountability tool to encourage a shift in power dynamics and echo the voices of colleagues, partners, suppliers, and workers in production countries. TIWW plans to update the metrics data at least until 2025 to gage progress in the industry and support positive change.
Metrics Data Updates and Learnings 2023
Scores on this metric sit on a range from -100 to +100. The industry scored a minor increase of 1 point from +39 in 2022 to +40 in 2023. Data was gathered in partnership with Better Buying Institute. Amongst the findings was that approximately 25% of more than a 1000 suppliers across 54 countries viewed buyers as ‘detractors’ in their business relationships in varied areas such as process innovation, stability, timing, and efficiency. However, there were significant score differences between regions. For a detailed breakdown, check the partnership index report on TIWW’s website.
Karen linked purchasing practices to negative social and environmental outcomes and pressed on the importance of real long term partnerships vs the current landscape of fleeting and unequal buyer/supplier relationships that impede workers and management efforts to improve working conditions. TIWW announced that they will be hosting a deep dive session in purchasing practices later this year.
Credit: The Industry We Want
Scores on this metric show a 3.5% growth in the average wage gap in 28 countries to 48.5% as of 2022. Which means that workers in these countries are getting less than HALF the money they need to make a decent living. The sector is famous for contracting cheap disposable labour but it is deeply concerning that in spite of all the initiatives, resources, and programs dedicated to this issue, the wage gap continues to rise. Figures on minimum and living wage pulled from 28 garment countries are available on TIWW website, they aim to keep updating this metric by collecting more data and adding more countries.
Credit: The Industry We Want
in 2022, this metric used information from 2021’s Road Map To Net Zero, that estimated emissions by 1.025 GT. Since then that number has been recalculated with the support of the latest data on fibre emissions from The Textile Exchange Report. The updated numbers show a slight decrease from 0.889 GT in 2022 to 0.897 GT in 2023. Projections of current activities predict a rise to 1.17 GT by 2030 if the industry doesn’t take urgent action. That means we’re absolutely off-track to limit global warming to 1.5 degrees. The impact of climate change is felt keenly by production countries. Forced migrations due to flooding, poverty, and inequality make garment workers one of the most at-risk communities in the world.
Credit: The Industry We Want
Karen concluded that progress is stagnating on all metrics, which makes accelerating change crucial in order to have a thriving industry that has positive social and environmental impact. While metrics can’t solve problems, they can help start challenging conversations. They can also be used as a resource, a facilitator, and an ally for under-represented voices.
The panel discussion was moderated by Noor Naqschbandi, Director of The Sustainable Consumption Program at The German Association for International Cooperation (GIZ). The panelists were Deddy Mahadika, Engagement Manager of Southeast Asia and Oceania at Science Based Targets Initiative (SBTI), Evelyn Astor, Economic and Social Policy Advisor at International Trade Union Confederation (ITUC) and Board Member at Ethical Trading Initiative(ETI), and Anne Patricia Sutanto, VPD of Pan Brother.
Causes of Environmental, Social, and Commercial Issues in The Garment Industry
Anne emphasized the role of purchasing practices in making or breaking progress in the sector from her perspective as a representative of a production company. She pointed out a need for buyers to familiarize themselves with processes across the supply chain and to seek to understand the needs and challenges of each of its layers in tier 1,2, and 3. She wanted to see more conversations built around finding solutions to avoid the impact of disruptions, such as the pandemic, on the lower end of the industry.
Evelyn recognised her findings on living wages to be reflected in the TIWW metric. She identified five root causes of the living wage crisis across production countries:
- The role of regulatory environment: many countries don’t have a predetermined standard for minimum living wage, and many that do, have it unrealistically low. Romania and Bulgaria’s living wage is a quarter of what workers need to provide for their families.
- The Issue of Non-compliance: according to the International Labour Organization (ILO) a third of the garment sector in Pakistan, Thailand and Indonesia, and a half in India and The Philippines don’t comply with their national legal minimum wage standard.
- Government Exemptions of Minimum Wage: some countries such as Guatemala allow suppliers to go below minimum wage by issuing exemptions.
- Oppression of Freedom of Association and Collective Bargaining: violent attacks on these rights are increasing in many countries such as Myanmar. Access to these tools is crucial for workers to negotiate decent wages.
- Purchasing Practices: buyers drive low wages by exploiting competition amongst suppliers and forcing them to take orders just at or even below cost of production.
Deddy had a more hopeful perspective as he reflected on the growth that conversations around climate change have seen in the past few years, while recognizing the major gaps to be filled in terms of companies taking action towards reducing their emissions. He pointed out the importance of quality data but emphasized that companies need to take immediate action and not wait for perfect data. He highlighted the dangers of climate change to the industry as it impacts production countries and the necessity for making a business case for environmental responsibility. Deddy believes that voluntary initiatives offer great support but also that mandatory regulations are needed.
Changes Needed to Achieve Progress
Anne, as a member of the National Apparel Federation in Indonesia, underlined the importance of transparent, solution-oriented, and collaborative communication. She added that open and positive communication has the capacity to improve productivity on all levels in the industry and that holistic resilience is good for everyone involved.
Evelyn focused on the need for trade agreements that contain specific expectations and criteria for social responsibility, unions, and wages. She noted the need to separate wages as itemized costs to make sure decent living is being paid, and that changes to orders don’t end up making the wages an adjustment variable. She brought forward the work of the trade agreement ACT that enables its members of major brands and trade unions to work together, and provides the framework for fair purchasing practices.
Deddy encouraged engagement with voices from production companies. He pointed out that although his work at SBTi relies heavily on the decarbonisation pathway from the Paris Agreement, a level of fairness is needed when addressing reduction of emissions in production countries. The global community need to consider regional differences in level of engagement, resources, and infrastructure. He urged stakeholders to develop contacts among local legislators, make sure they get the science right, and develop pathways with local experts.
The Role of Multi-Stakeholder Initiatives
Anne believes that measuring progress, informed by data and transparency, is essential for production companies to be able to take care of their people, and work in a clean and fair environment. She finished by stating that everyone bears responsibility in the pursuit of solutions.
Evelyn pressed that setting and enforcing evidence-based living wage is a regulatory task but that MSIs are complementary to regulations as they drive wages beyond what is currently legally required, and signal to policy makers that it is possible to raise the legal minimum. She also sees MSIs as a useful tool to potentially resolve industry disputes in an amicable way.
Deddy said that MSIs drive ambition for governments by pushing the agenda. He reiterated the urgency for companies to take action today without waiting for perfect data, by setting targets and tracking and disclosing progress. Measuring emissions will support building better data which will feed back into companies’ progress.
The webinar was closed by a contribution from Matthias Altmann, Sector Lead at OECD Centre for Responsible Business Conduct, who expressed his support for TIWW and the industry dashboard. He hoped that the data will encourage a move to mandatory due diligence. Matthias noted that the living wage issue feeds into other human rights transgressions such poor health and safety and child and forced labour, and that we need to take steps to prevent such harm. He expressed that OECD believes that companies’ slow progress and struggle to enable living wage is mainly because they don’t know how. OECD will be launching a handbook to address this issue later this year which will provide a guide for better purchasing practices and buyer-supplier collaborations.
There were more sessions and webinars to come under the OECD Forum on Due Diligence in the Garment and Footwear Sector in February 2023, recordings are available on their website.