The Platform Living Wage Financials (PLWF), a coalition of 24 financial institutions working to enable living wages and living incomes in global supply chains, released its 2023-2024 report, Turning Commitments into Action: Defining the Future for a Living Wage (January 2025). The report assesses the progress of investee companies on facilitating living wages and living incomes in the apparel and food supply chains, in the lead-up to the 2030 deadline for achieving the UN Sustainable Development Goals (SDGs).
Human Level’s Take:
- Financial institutions are looking for stronger progress and better transparency from companies when it comes to living wage and living income in their operations and value chains.
- The Platform Living Wage Financials, a coalition of 24 financial institutions, has found that garment and footwear companies are advancing on living wage commitments, with many disclosing supplier locations, setting policies and participating in multistakeholder initiatives — but a number of gaps still remain. In particular, the food agriculture and food retail sectors are lagging behind the apparel sector, with limited progress on living wages and incomes, and evidence of "box-ticking" compliance rather than substantive action.
- What’s needed? Implementation of strong policies and human rights due diligence practices across the board. This includes mainstreaming policies on living wages and living incomes throughout the business; meaningful stakeholder engagement with affected workers and farmers; effective, collective multistakeholder action to address root causes; remediation for harms; and qualitative and quantitative tracking on progress and outcomes on the ground.
- All of this is underpinned by the need for better disclosure around living wage and income progress.
Some key takeaways:
- Garment and footwear companies are making progress, but more needs to be done: This sector is making living wage commitments and advancing to meet them. In terms of transparency, nearly three-quarters of investee companies currently disclose the locations of their own sites and Tier 1 suppliers. Many companies are setting living wage policies, including 80% of companies with a responsible sourcing policy, a third of which provided evidence of implementation in practice. However, there remain some gaps between company policies on living wages and recent global standards like the ILO definition of living wage, EU Corporate Sustainability Due Diligence Directive (CSDDD), EU Corporate Sustainability Reporting Directive (CSRD) and UN Global Compact Forward Faster Initiative. In addition, companies have made progress on remediation efforts, but disclosures in this area still need improvement, and tracking of living wage strategy effectiveness is limited. Many brands are also working to engage in collective action through multi stakeholder initiatives on living wages, but there are limited efforts to track actual impact on the ground. Likewise, tracking the effectiveness of living wage strategies at a company level remains lacking.
- Food agriculture and food retail sectors are lagging behind: For its part, the food sector is not making significant progress on ensuring living wages and living incomes. While more food agriculture companies are creating policies that recognise a living income for supply chain workers and producers, there is no evidence that living income targets are effectively implemented or that gaps are being closed “in a structural and substantial way.” In addition, some companies are not paying their own workers a living wage and have not published information on calculation of wage gaps. Some food companies across both agriculture and retail are taking a “box-ticking” approach to meeting human rights due diligence requirements under the CSDDD and CSRD. At the same time, the report anticipates a positive effect on living wages due to European regulations, including for companies outside of the EU. Positively, there has been a small increase in the number of food agriculture companies implementing grievance mechanisms. In addition, some sectors are making more progress: cocoa companies are beginning to measure living wage and living income gaps, with the support of national initiatives like IDH’s Dutch Initiative on Sustainable Cocoa (DISCO) and similar programmes globally.
- Actions leading up to 2030: The report highlights areas of opportunity for both the garment and food sectors to strengthen action on living wage and living income, and meet 2030 SDG targets. Across both industries, companies are asked to implement and strengthen policies on living wages and living incomes to meet international standards and relevant reporting regulations. Food retail companies in particular are urged to set standardised living wage policies that are consistently applied across subsidiaries and global operations. Both industries also have room for improvement on grievance mechanisms. Within the apparel sector, companies should report evidence that grievances are monitored and disclose the types of grievances they receive. Food companies, especially in agriculture, are expected to develop accessible, effective grievance mechanisms open to external stakeholders like farm workers, and should improve tracking and disclosure of grievances and remediation provided. In terms of multistakeholder initiatives, there are opportunities across sectors to improve disclosure on engagement with suppliers and workers through these initiatives and to demonstrate impact on the ground. Collaboration with civil society organisations will be key to success, especially in the food sector. In addition, for the garment and footwear sector, the report advises companies to map and disclose their supply chains beyond Tier 1, to provide more information on how responsible purchasing practices are implemented in practice, and to disclose qualitative and quantitative indicators to close the living wage gap. Finally, for the food sector, the report urges companies to implement more time bound targets, their calculations on income and wage gaps, and to pay higher farm-gate prices to support farmer incomes and worker wages.
