Sanqvist has shown progress and met most of FWFs’ performance requirements. The brand monitored 96% of its production volume in 2018, which is well above the 80% requirement for the third year of membership. Sandqvist’s benchmarking score is 73, placing the member in the Good category.
The brand has a small number of suppliers and only sources in India and Vietnam. Over the last two years, the brand has grown and expanded its product base. At the same time, the brand also increased its CSR and quality requirements. This meant that the brand had to stop working with two suppliers in India. In India, the brand is aware of the risks of young workers being employed in mills. The brand has visited its spinning mills in the last year and also moved production to mills where workers come from nearby residential areas, lowering the risk of young workers being employed through the Sumangali scheme. Aside from that, for its CMT factories in Kolkata the brand has engaged the supplier in addressing the culture of employing ‘contract’ workers.
In Vietnam, to mitigate risks, the brand sources from suppliers that work with big brands (who are members of FLA, BSCI etc.) and other FWF members. The brand has not yet been able to receive a commitment from suppliers to work on complex issues pertaining to overtime, worker representation and Living wage.
Audits in 2016 indicated issues related to minimum wage at a supplier in India. The brand completed a root cause analysis of this issue – linked to ‘dearness allowance’ – and has offered to contribute an additional amount. This is to ensure that a standard higher than prescribed ‘dearness allowance’ is always paid and so fluctuations do not lead to a situation where the allowance paid is lower than legally mandated.
For the Indian suppliers where the brand has good leverage, the brand is aware of the Labour Minute Values and Labour Costs for every style. Two suppliers also did an analysis to estimate a target living wage based on interaction with workers, food basket values and inflation. The brand also analysed the Anker estimates. The brand is yet to define and agree on a target wage and increase wages at the suppliers. As a next step, FWF encourages Sandqvist to engage in discussions with suppliers in India about different strategies to work towards higher wages. FWF also encourages the brand to involve worker representatives when defining a target wage and approach to ‘getting the money to workers’. FWF recommends that Sandqvist expand its knowledge of cost breakdowns to suppliers in Vietnam and work closely with them to persuade them to work on issues pertaining to overtime, worker representation and Living Wage.
This brand performance check report is for both Suitsupply and Suistudio. Suistudio is a brand owned by Suitsupply B.V. and shares the CSR department. Suitsupply’s production locations include all of Suistudio’s production locations.
Suitsupply has shown advanced results on performance indicators and has made exceptional progress. In the past financial year (2018), Suitsupply has monitored 98% of its total FOB. It has gone beyond the FWF required monitoring threshold of 80% for a member past three years of membership. Suitsupply scored 83 in this brand performance check, which means that the company is again placed in the ‘Leader’ category.
Suitsupply has increased the number of its production locations due to business expansion. It managed to maintain high leverage in most of its suppliers and continues to work with existing suppliers. Suitsupply could demonstrate the link between its prices and the wages paid to workers, which helps to ensure minimum wage. Suitsupply has conducted various projects in partnership with its suppliers to increase worker wages towards living wages. In most factories, Suitsupply used a FWF local audit team to identify issues and continuously made efforts to remediate. All three complaints received from workers in 2018 have been resolved. In order to involve workers in the process of improving working conditions, Suitsupply has started to conduct a worker wellbeing survey. In addition, Suitsupply worked with a trade union in Myanmar to provide training on freedom of association to the workers.
FWF encourages Suitsupply to continue its path in improving working conditions with the engagement of workers and their representatives. Suitsupply could take an advanced step in demonstrating its progress and impact by increasing wages and facilitating social dialogue.
In 2018, HAVEP met most of FWF’s performance requirements. With 85% of its supply base under monitoring, the brand meets the threshold for member companies after their 3rd year of membership. HAVEP has reached a benchmarking score of 71, placing it in the ‘Good’ category.
HAVEP has a stable supplier base. The vision for long-term relationships is further strengthened with these suppliers. The new pricing strategy of the company in combination with a strong production planning and knowledge of the standard minutes per style allows HAVEP to make serious strides forward in the payment of a living wage for factory workers. Future performance checks will inform us if HAVEP has been able to monitor its efforts and verify if the additional price paid also led to a higher income for the workers.
Besides monitoring its efforts on the payment of a living wage, FWF requires HAVEP to work on a systematic approach that will integrate social compliance into normal business processes and support good decision-making. The approach needs to ensure that the member consistently evaluates the entire supplier base and includes information into decision-making procedures. In addition, FWF CAP follow-up should be better captured in a structured monitoring system to support the work of the country teams and of HAVEP’s head office.
Mammut has met most of FWF’s performance requirements. The brand monitored 92% of its suppliers, which meets the required monitoring threshold after three years of FWF membership. With a score of 66 points, Mammut is placed in the ‘Good’ category.
In 2018, Mammut continued with its sourcing strategy to transfer production from China to Vietnam and Bangladesh. The brand made use of 63 production locations, which is a small decrease compared to last year. Mammut has long term relationships with its main suppliers which usually have multiple production locations in various countries. The shift in production locations by its main suppliers meant that Mammut had to build new relationships with those new factories, monitor them and follow up on labour standard violations. Mammut has a strategy in place to further reduce the total number of suppliers.
Mammut has good systems in place to monitor suppliers, evaluate their performance and assess country risks. However, the strategy chosen by Mammut and its main suppliers to change production locations continues to pose challenges in monitoring suppliers and actively following up on audit results.
In 2018, Mammut also made further progress on the topic of living wages. Using its initial research on price calculations by factories as the basis, the brand continued to research the current labour minutes per style and made an overview of the current wages paid to sewing workers in its most important factories. These are important stepping stones towards payment of a target wage in Mammut’s production locations.
Compared to the year before, Mammut seems to have better control over the sourcing practices of its Japanese subsidiary. Mammut’s purchasing department is nowadays controlling the placement of production at new suppliers by the Japanese subsidiary.
Manroof has met most of FWF’s performance requirements. It monitored 82% of its total purchasing volume, which is above the 80% required by members after three years of membership. The benchmarking score of 50 places Manroof in the ‘Good’ category.
In 2018, Manroof increased its orders at its main supplier in China. This supplier works together with Manroof’s external CSR consultant on the implementation of the FWF Code of Labour Practices. Manroof actively follows up on audit findings and hired an external consultant to start the dialogue with its main Indian supplier on a finding which showed payments below the legal minimum wage. In 2018, Manroof’s CEO, who is responsible for CSR within the company, actively contributed to FWF’s visibility in Switzerland.
In 2018, Manroof made the gap between the average wage and living wage benchmarks visible for two of its Chinese suppliers. Although this is a good first step, Manroof needs to discuss the gap with its suppliers, agree on a target wage, and start implementing measures to close this gap.
While Manroof does conduct due diligence, a formal process should be in place to evaluate the risks of labour violations. Furthermore, additional risk mitigation measures should be taken and a systematic approach for evaluating Code of Labour Practices compliance of Manroof’s entire supplier base should be implemented. Moreover, Manroof is required to actively raise awareness about the FWF Code of Labour Practices and FWF complaints hotline among its suppliers. For the next Brand Performance Check, Manroof needs to make sure to meet the monitoring requirements for its tail-end production locations.
Kjus has shown shown progress and met most of FWFs’ performance requirements. Kjus has a stable supplier base and enjoys a long-term busines relation with most. Kjus monitors 93% of its purchasing volume, which, in combination with a benchmarking score of 75, means that Kjus just maintains its Leader status. FWF strongly encourages Kjus to improve its benchmarking score in order to maintain its Leader status in the future.
As Kjus’ supplier factories tend to be relatively big, Kjus does not have high leverage at its suppliers. FWF recommends Kjus to consolidate its supplier base where possible, and increase leverage at main supplier(s) to effectively request improvements of working conditions.
Kjus needs to ensure it has sufficient capacity to follow up diligently towards resolution of corrective actions with all of its suppliers. It also needs to monitor all factories which account for more than 2% of its total purchasing volume. FWF furthermore recommends Kjus to only close issues when verification can be provided by showing proof (pictures, documentation) or by on-site visits of Kjus, by including worker representation, or an independent third party.
Kjus is implementing a living wage project as a shared supplier in Vietnam. After a promising start during which the brands calculated a target wage, progress slowed down a bit in 2018. Kjus is advised to work with the other FWF brands and take the next steps to ensure that all workers at the pilot factory receive the target wage.
Schöffel has shown advanced results on FWF performance indicators. With a monitoring percentage of 98% and a benchmarking score of 82, it remains in the Leader category for the fifth year in a row.
In 2018, Schöffel’s purchasing department structure changed in order to improve purchasing practices, with the intention of further consolidating its product supply chain as well as to making the transition from CMT business to buying full price products. Due to consolidation and the shift into full price products, 18 suppliers were exited in 2018. All CMT suppliers were informed about the shift to full price products two years in advance. All factory exits were discussed with the suppliers in advance and mutual agreements were reached in order to avoid potential negative consequences for the workers. Some factories (Turkey) were exited due to a lack of cooperation on improvements around the CoLP.
In 2018, 90% of Schöffel’s production volume came from factories where the company buys at least 10% of production capacity, and 53% of its total FOB came from the suppliers where the business relationship has existed for at least five years. Due to the fact that 97% of the total production comes from high-risk countries – of which 69% is sourced from Vietnam – a strong supplier monitoring process is required. The company’s due diligence and monitoring processes are strongly embedded in the company with the Head of Purchasing and senior management supporting the implementation of the Code of Labour Practices. In the past year, Schöffel has been continuously working on reducing the excessive overtime and has shown improvements in following up on corrective actions. The company’s local office in Vietnam has been expanded. The local staff enables Schöffel to effectively support factories with social and safety compliance as well as capacity building.
FWF encourages Schöffel to continue its efforts towards mitigating the root causes of overtime and try to demonstrate that the Schöffel’s measures have led to a reduction in overtime. FWF furthermore recommends that Schöffel continues its work on living wages and scale up raising the wage levels outside the pilot project.
In 2018, Living Crafts met most of FWF’s performance requirements. With 81% of its supply base under monitoring, Living Crafts meets the threshold for member companies in their third year of membership. With a benchmarking score of 56, Living Crafts is awarded the ‘Good’ category.
Living Crafts is part of Dennree, and provides the corporate group with workwear clothing and other specific textile products (e.g. various bags).
Living Crafts’ purchasing strategy focuses exclusively on natural textiles with the corresponding certification (GOTS). The 2018 business year was a success, and Living Crafts was once again able to achieve double-digit growth. Throughout 2018, Living Crafts visited its suppliers, stabilised its supplier base and onboarded four new suppliers in India, Turkey and Serbia. When onboarding a new supplier, Living Crafts prefers to work with suppliers that already produce for another FWF member. This helps to gain leverage and provides a higher chance of achieving improvements on working conditions at shared suppliers.
In 2018, Living Crafts has further improved its internal system of the suppliers’ evaluation but still needs to use this system in a more systematic way. Furthermore, Living Crafts should continue working on living wages as follows :
- Assessing the root causes of wages that are lower than living wages, taking into account its leverage and effect of its own pricing policy
- Analysing how to increase wages and develop a strategy to finance the costs of wage increases
- Setting a target wage for its suppliers based on its analyses and financing strategy
The role of CSR and Head of Purchasing is combined. In the past few years, Living Crafts’ turnover has significantly increased and there is an urgent need for additional support for sustainability efforts to drive all projects successfully. FWF recommends allocating more manpower to the CSR department.
Swiss Post has met most of FWF’s performance requirements. It monitored 100% of its total purchasing volume, which is well above the 80% required by members after three years of membership. The benchmarking score of 77 places Swiss Post in the ‘Leader’ category.
In 2017, Swiss Post went through an organisational structure change and developed an overall corporate responsibility purchasing strategy, which provided its first results in 2018. The strategy’s main targets are efficiency, effectiveness, compliance, sustainability and innovation. The company provides its employees with an assortment of 16 garments for all weather and working conditions. All garments must be produced in a responsible and transparent way that is guided and measured by multiple independent organizations.
In 2018, 44% of Swiss Post’s total FOB was sourced in high-risk countries (Bulgaria and China) and 56% came from low-risk countries (Slovakia, Hungary, Portugal, Poland, Germany, Switzerland). A very high percentage (93%) of the company’s FOB comes from the suppliers with which the company has worked at least five years. This shows the commitment of Swiss Post to establish and work with long-term suppliers. The company has an outstanding process in place to conduct human rights due diligence and to implement the FWF Code of Labour Practices within its direct suppliers or through its intermediary. The continuous evaluation of the suppliers had led to a decision of exiting China due to small order volumes, which is considered ineffective when it comes to transport and sustainability. Swiss Post is proactive in collecting all information on the wages paid and therefore knows the wage levels at its suppliers. The information is collected through wage calculations at its production sites by using DNA transparent price calculation sheets, which, aside from the working minute per piece and the price per minute, also gives insight into direct labour costs, indirect labour costs and overhead. The brand compares this information to the legal minimum wage levels in the countries. However, in one case in Bulgaria, the supplier would not disclose the number of working minutes it needs, thus Swiss Post has to rely on the intermediary to receive information.
FWF encourages Swiss Post to actively continue working with its suppliers on improving the targets towards living wage payments.
NEUE MASCHE has shown progress and met most of FWFs’ performance requirements monitoring 73% of their supply chain and has gone above and beyond the monitoring threshold of 40% for their first year of membership. NEUE MASCHE has a consolidated supplier base and works with a small number of suppliers, which they build and maintain strong personal relationships with. This allows NEUE MASCHE to work effectively on improving working conditions. This, in combination with a score of 57 points, means that NEUE MASCHE is awarded the ‘Good’ category.
In the first year of membership NEUE MASCHE has implemented significant changes to their due diligence process to support responsible sourcing practices through the use of their supplier check list that makes CSR a high priority in defining and deciding the continued partnership with suppliers both new and existing.
NEUE MASCHE has strong forecasting and production planning systems in place. Due to the nature of their business, orders must be placed well in advance and because of this it allows NEUE MASCHE’s suppliers to be flexible in their production planning, so much so that some suppliers have even requested receiving orders later in the season.
For the upcoming year the challenge for NEUE MASCHE is to obtain more insights in the impact of its pricing policy on factory level, especially the labour cost of products. This could support NEUE MASCHE to assess the impact of its prices on living wages and include this in price discussions with suppliers, to together works towards living wages.