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Dutch Investors Want Fair Wages for the Garment Industry

Dutch investors are calling for better wages in the garment industry.

Eight institutions representing a combined 725 billion euros ($839 billion) in financial firepower—Achmea Investment Management, ASN Bank, ASR Nederland, Kempen, MN, NN Investment Partners, Robeco and Triodos Investment Management—have linked arms to create Platform Living Wage Financials (PLWF), a coalition that is further backed by ABN Amro, an Amsterdam-based bank, and the pension funds PME, PMT and MITT.

The platform seeks to ensure garment and footwear brands in its members’ investment portfolios have “adequate processes and policies in place to enable the payment of living wage in their global supply chains,” wrote MN in a position paper last week. “Over time, the companies should also show adequate progress on the way toward living wage implementation.”

By “guiding and assessing” the companies to determine which ones have been leading on the issue and which must do more, the PLWF aims to “motivate the ‘laggards’ to follow their better-performing peers,” MN noted, adding that it works with 14 large listed garment and footwear brands, but the PLWF has an “even broader reach” as a whole.

“As shareholders, we can make the difference,” said Karlijn van Lierop, head of sustainability at MN, in a statement. “International organizations and non-governmental organizations (NGOs) have been advocating fair pay in the sector for years, but most multinationals pay laborers in poor countries the minimum wage, which is often much lower.”

Textile firms are more likely to speed up wage increases if investors pressed the issue, van Lierop said. While previous engagement between financial institutions and brands such as H&M, Nike and Index have focused primarily on labor conditions and safety, more can be done—and in a more holistic manner, too.

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“If parents get paid sufficiently, they can send their children to school,” she said. “And staff doing not too much overtime can have a better rest, which improves safety in the factories.”

MN and its partners officially launched the coalition on Sept. 27 at an event that was attended by 120-plus participants from Dutch and foreign financial institutions, NGOs, multi-stakeholder initiatives, government and private-sector representative and garment and footwear “targets” such as Asos, Esprit, Marks & Spencer and H&M.

Only half of the 27 brands and retailers the PLWF initially approached have policies in place to improve wages in their supplier countries in the developing world, van Lierop said. Some of the lower-scoring companies, she added, “didn’t even know the pay level at their suppliers.”