The need for bold commitment and action from the private sector
The private sector – whether global multinationals or local businesses – has a huge impact on livelihoods and living conditions worldwide. But all too often, the actions (or inactions) of private sector actors can reinforce the systems that trap people in poverty. We urgently need fairer business models that enable decent and dignified work in global supply chains.
That’s why Oxfam is encouraged to see Unilever, already a leading actor in driving sustainable business models, making bold commitments to tackle social inequality, including:
- Ensuring that everyone who directly provides goods and services to the company earns at least a living wage or income by 2030
- Spending €2 billion annually with suppliers owned and managed by people from under-represented groups, by 2025
- Equipping 10 million young people with essential skills to prepare them for job opportunities, by 2030
Gabriela Bucher, Executive Director of Oxfam International, says: “Unilever’s new commitments show the kind of responsible action needed from the private sector that can have a great impact on tackling inequality, and help to build a world in which everyone has the power to thrive, not just survive. We welcome Unilever’s commitments for living wages and farmer incomes in the global supply chain – an important step in the right direction – and are proud to have been a partner of Unilever as it formed this ambitious new plan”.
A long-term, multi-layered partnership
Oxfam’s journey with Unilever began almost 20 years ago, with discussions about a multinational company’s role in reducing poverty leading to a joint study in Indonesia exploring the impact of Unilever’s operations on poverty. This led to collaborative programmes in Unilever’s agricultural supply chain and a dialogue developed on workers’ rights.
In 2010, after allegations highlighted serious labour issues in Unilever’s supply chain, Oxfam proposed an independent ‘gap analysis’ study of working conditions in Vietnam to which Unilever agreed. Oxfam’s findings highlighted low wages, disempowered workers, gender discrimination and more. The ground-breaking study was the accelerator for Unilever’s work on fair compensation.
“The outcomes of the Oxfam Vietnam report played an important role in shaping our Framework for Fair Compensation” says Rachel Cowburn-Walden, Unilever’s Global Director, Human Rights Stewardship. Returning for a follow-up report three years later, Oxfam found a range of improvements had been made in global policies and Unilever’s Vietnam factory, although systemic barriers in the supply chain still remained.
To explore the best ways of improving conditions in Unilever’s extended agricultural supply chains, Oxfam and Unilever, together with the Ford Foundation, collaborated on the Enhancing Livelihoods Fund – ELF (between 2015-20). ELF worked with Unilever’s supply chain partners to improve their social impact in sourcing from smallholder producers across value chains from cocoa to vetiver. We did this while aiming to minimize risk for smallholders, empower women in the supply chain and improve working conditions. Some of the lessons from ELF influenced wider work, for example, in the way Unilever now collaborates with other stakeholders to support smallholder farmers.
In contrast to the broad approach taken in ELF, the Malawi Tea 2020 programme focused on a specific supply chain in a single country. Along with 21 signatories (governments, trade unions, tea producers and companies like Unilever), the programme aimed to create a competitive and profitable Malawian tea industry where workers earn a living wage and smallholders earn a living income. This involved working at both ends of the value chain: in Malawi, by removing barriers to collective bargaining and in the UK, by engaging and holding tea brands to account on sustainable procurement.
While the initiative had mixed success, achieving a 33% reduction in the living wage gap against the 100% target, Oxfam, Unilever and other partners learned a huge amount about sustainable procurement models, especially the business practices that support producers’ ability to pay a living wage.
Looking to the future
These are just some examples of how we’ve partnered with Unilever to drive positive change on working conditions and livelihoods. Alongside this, our trusting and transparent relationship has led to provocative conversations and constructive challenges that have pushed both Oxfam and Unilever further ahead on our thinking and actions. As part of the work to support responsible business action, Oxfam is proud of the contribution it has made to the ambition behind Unilever’s new commitments, in particular the integration of sustainability into core business priorities.
Rebecca Marmot, Unilever’s Chief Sustainability Officer, says:
“Unilever is proud of our long-standing partnership with Oxfam, which has supported us in our ambition to enhance the livelihoods of millions in our supply chain. Working with Oxfam has undoubtedly encouraged us to make ambitious commitments in many areas. We look forward to expanding our partnership further as we implement our new social strategy over the next decade.”
With the optimism the launch of this pioneering strategy brings, comes determination and mindfulness of the magnitude of the task ahead. This marks the beginning of a decade-long journey to 2030.
“How Unilever implements its plan is crucial,” says Gabriela Bucher. “We’ll work alongside Unilever as it does this, helping it to deliver for under-represented groups, to accelerate systemic changes and to shift industry practice and laws.”