Why we fought to ensure that everyone in our supply chain had a living wage

5 min read

Original note published in World Economic Forum

Why we fought to ensure that everyone in our supply chain had a living wage
Why we fought to ensure that everyone in our supply chain had a living wage

Posted by Alan Jope, Chairman of the Board of Unilever

  • Global inequality destroys trust in institutions, breaks society and slows economic progress.
  • Unilever is committed to ensuring that all people who supply goods and services directly to the company are earning at least a living wage or income by 2030.

Capitalism changes and evolves, so our market-based systems build on their historical strengths to incentivize outcomes that are better for people, the planet and our economy. However, the current rate of change is not fast enough. The two greatest collective challenges – social inequality and climate change – keep getting worse, not better.

In 2020, there was a sharp increase in the number of companies that committed net carbon emissions and much remains to be done on that front. I believe 2021 will change corporate commitments to address social inequality too. The COVID-19 pandemic has exposed the depth of this problem and widened the gap for many. It’s time to act.

Inequality is not a game of winners and losers; we all lose. Inequality destroys trust in institutions, including companies, breaks society, and slows economic progress.

I believe companies can help eradicate entrenched social inequalities. Businesses are the engine of prosperity that can improve the lives of billions of people around the world. To do this, however, companies must act in such a way that this wealth is distributed more fairly. Simply put, there are too many people who don’t ask enough. They’re getting an unfair share of the value they create, and that has to change.

Share value fairly

On January 21, Unilever announced a series of new commitments to eradicate social inequality, which are key elements of our multi-stakeholder business model. This includes a commitment to ensure that everyone who supplies goods and services directly to Unilever is earning at least a living wage or income by 2030.

I highlight this specific commitment because we know that achieving it will require the collective action of business, governments, civil society, trade unions and the academic world. We need to drive this systemic change on an unprecedented scale.

Increasing the income of the world’s worst paid people can bring tremendous benefits in terms of health, education, gender equality, and quality of life. s will see higher productivity and engagement, lower turnover, and a more affluent consumer base. All of this will benefit local, national and global economic performance.

Collective action for a collective good

For the past five years we have worked hard to improve the livelihoods of millions of people in our value chain through programs designed to help small traders and smallholders.

While we have improved the lives and livelihoods of millions of people, we have not changed the game or created the broader systemic change that we sought. Our ultimate goal is that everyone in our value chain, just like our own employees, earns an appropriate salary or income.

To achieve this new normal, however, we need change where forces from all sectors work together to make it happen. A first step will be to create reliable, scalable, transparent and comparable methods for the living wage and better visibility of the data on the living wage in order to raise the minimum level in all sectors and countries.

Fulfilling this obligation will not be easy. We don’t have all the answers and, frankly, the scale of the challenge makes me nervous. However, I am convinced that this is the right thing both morally and financially, and I am comforted by the fact that we have friends in Patagonia, L’Oreal, Nestlé and other countries who have already embarked on this path.

With the development of capitalism, a fairer distribution of values ​​becomes a central characteristic and living wages as the minimum threshold become the norm. However, standards don’t just emerge, they are created, and we believe that the leaders who drive this agenda will be the successful companies of the future.

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