GRI Living Wage 2022
Living
Wage
Our goal to achieve living wage by 2030, touches upon 2 out of 8 Sustainable Packaging Criteria
By 2030, 100% of our key production partners’ employees earn at least a living wage.
Goal
A first basic risk assessment conducted shows that six key production partners – together employing 15,000 employees – are based in an area where the minimum wage is less than a living wage. Meaning, 40% of our key production partners’ employees earn at least a living wage.
Baseline
LC Packaging aims to enable all our Tier 1 key production partners to (continue to) pay their employees at least a living wage by 2030. Together, these partners represent just over 80% of our procurement spend (2021) and employ nearly 25,000 employees and contractors.
Scope
In 2022, 40% of our key production partners’ employees earn at least a living wage. This percentage has remained the same compared to 2021.
Progress on goal
15,000
Assuming these employees have a partner and an average of two children, there are 60,000 people whose livelihoods could potentially be negatively impacted by these wages. Workers who do not earn a living wage can’t meet the basic needs of their families, creating the risk that their children (30,000) have to quit school to contribute to the household income.
Based on a first basic risk assessment conducted in 2022, key production partners at risk of not paying a living wage were identified. ‘Risk’ key production partners are not SA 8000 certified and are based in countries and industries where the minimum wage does not equal a living wage and ‘wages’ and ‘working hours’ are salient issues according to the Sedex Inherent Risk Score. 37% of key suppliers are at risk of not paying a living wage, together employing approx. 1,500 employees.
Explanation
Actions
2022 was the year of gaining knowledge on the topic of a living wage: understand methodologies used and identify initiatives and best practices.
01
01
Policies, codes, and commitments
02
Awareness and
implementation
03
Research and
development
04
Data and
reporting
Policies, codes, and commitments
Our Human Rights Policy and Sustainable Supply Chain Policy were updated in line with our living wage ambition.
A new Code of Conduct for Key Production Partners was drawn up and presented to the first group of production partners. This code includes a requested commitment to pay at least a living wage by 2030.
Next steps
As looking forward is even more important than looking back, below is a brief overview of actions we are planning to take next.
In collaboration with Sedex, conduct in-depth research to gain knowledge on relevant living wage benchmarks, initiatives, regulatory developments, and living wage implementation challenges and solutions, in the areas where key production partners are based.
Continue the dialogue with key production partners and invite them to join our living wage commitment.
In collaboration with IDH – Sustainable Trade Initiative, train and support our key production partners in calculating the potential living wage pay gap.
Use the living wage gap reports to define an action plan in collaboration with our key partners.
Further improve data quality and availability, leading to more reliable data for living wage reporting and decision making.
For more detailed information on social topics related to our workforce and our value chain, including (customer) health and safety, talent & development, human rights, business ethics and information security, please refer to our 2022 Social Report.
2022 Social Report
2022 Social Report
Committed
© 2023 LC Packaging
www.lcpackaging.com
15,000
GRI Living Wage 2022
Living
Wage
Our goal to achieve living wage by 2030, touches upon 2 out of 8 Sustainable Packaging Criteria
A first basic risk assessment conducted shows that six key production partners – together employing 15,000 employees – are based in an area where the minimum wage is less than a living wage. Meaning, 40% of our key production partners’ employees earn at least a living wage.
Baseline
By 2030, 100% of our key production partners’ employees earn at least a living wage.
Goal
LC Packaging aims to enable all our Tier 1 key production partners to (continue to) pay their employees at least a living wage by 2030. Together, these partners represent just over 80% of our procurement spend (2021) and employ nearly 25,000 employees and contractors.
Scope
In 2022, 40% of our key production partners’ employees earn at least a living wage. This percentage has remained the same compared to 2021.
Progress on goal
Explanation
Based on a first basic risk assessment conducted in 2022, key production partners at risk of not paying a living wage were identified. ‘Risk’ key production partners are not SA 8000 certified and are based in countries and industries where the minimum wage does not equal a living wage and ‘wages’ and ‘working hours’ are salient issues according to the Sedex Inherent Risk Score. 37% of key suppliers are at risk of not paying a living wage, together employing approx. 1,500 employees.
Assuming these employees have a partner and an average of two children, there are 60,000 people whose livelihoods could potentially be negatively impacted by these wages. Workers who do not earn a living wage can’t meet the basic needs of their families, creating the risk that their children (30,000) have to quit school to contribute to the household income.
Actions
2022 was the year of gaining knowledge on the topic of a living wage: understand methodologies used and identify initiatives and best practices.
01
02
03
04
Policies, codes,
and commitments
Our Human Rights Policy and Sustainable Supply Chain Policy were updated in line with our living wage ambition.
A new Code of Conduct for Key Production Partners was drawn up and presented to the first group of production partners. This code includes a requested commitment to pay at least a living wage by 2030.
Awareness
and implementation
A dedicated mandatory online training course has been launched for our employees, explaining LC Packaging’s living wage commitment. The course was launched in May 2022 and has a completion rate of 79.9%.
Through dedicated workshops on LC Packaging’s 2030 Ambition, in which 94% of all employees participated, for each business process (e.g., sales, logistics, HR, quality, production etc), ways to contribute towards achieving our goals have been identified and translated into short- and long-term targets and KPIs.
LC Packaging’s living wage ambition was shared with most of our key production partners, and potential challenges discussed.
To understand the financial impact for our customers of implementing a living wage, we created a living wage case for our FIBC production facility in Bangladesh, comparing the price of an average FIBC produced by workers receiving a minimum wage to that same bag if it were produced by workers receiving a living wage.
Research
and development
To define the scope, a first basic risk assessment was conducted to identify key production partners that are at risk of not paying a living wage.
There was consultation with organisations and initiatives involved in living wage projects, and methodology and tool design on how to approach our living wage journey.
Data
and reporting
A living wage calculation tool has been selected to start calculating the living wage gap in 2023, which will form the basis of an action plan for achieving our 2030 goal.
A process has been designed to collect additional data to be able to conduct a more in-depth risk assessment in our value chain.
Next steps
As looking forward is even more important than looking back, below is a brief overview of actions we are planning to take next.
In collaboration with Sedex, conduct in-depth research to gain knowledge on relevant living wage benchmarks, initiatives, regulatory developments, and living wage implementation challenges and solutions, in the areas where key production partners are based.
Continue the dialogue with key production partners and invite them to join our living wage commitment.
In collaboration with IDH – Sustainable Trade Initiative, train and support our key production partners in calculating the potential living wage pay gap.
Use the living wage gap reports to define an action plan in collaboration with our key partners.
Further improve data quality and availability, leading to more reliable data for living wage reporting and decision making.
For more detailed information on social topics related to our workforce and our value chain, including (customer) health and safety, talent & development, human rights, business ethics and information security, please refer to our 2022 Social Report.
2022 Social Report
2022 Social Report
© 2023 LC Packaging
www.lcpackaging.com
