Sustainability

1 January 2020

Guideline on living wages and incomes

Reading time: 4 min.

Many people in developing and emerging countries are still not paid a fair wage for their work or a fair income for the goods that they produce. The REWE Group sources many products from these countries and wants to improve the incomes of local people.

Background

A living wage or income is a fundamental human right, and yet this right is frequently violated due to the structural difficulties in developing and emerging countries, such as exploitative employment contracts. International agreements calling for the implementation of a living wage and income are not legally binding in nature and their provisions cannot be enforced. According to the International Labour Organization, 92 percent of these countries have a minimum wage, and yet the majority fall short of the cost of living. As a result of their parents’ low income, children often have to go out to work. In addition, small-scale farmers are dependent on global raw material prices for products such as cocoa, but these are subject to significant fluctuation.

Our goals

To improve the wages and incomes of the people across their supply chains,the REWE Group intends by 2025 to pilot different approaches to ensuring they receive a living wage and income. If successful, these efforts will be expanded. The retail group is also working to develop solutions with other companies, stakeholders and standards organisations and is taking part in benchmark analyses to determine what an appropriate and real living wage or living income should be. In addition, the REWE Group has communicated its requirements to all relevant suppliers, and it has included the achievement of a living income and wage across global supply chains as a long-term objective in its sustainability strategy.

Our measures

The REWE Group has defined a range of measures to help it achieve its goal. It is raising awareness of the need to respect human rights among its internal and external partners, such as through contractual obligations to pay the applicable national minimum wage or compliance with the customary working hours in the industry. Employees in Purchasing and Category Management receive regular training on the topic. The REWE Group is supporting local projects in the countries in question. For example, REWE and PENNY have been selling VERY FAIR chocolate in their stores since autumn 2020. This project ensures that the small-scale growers from a cocoa plantation in Ghana receive an additional bonus, or living income differential, on top of the Fairtrade premium and minimum prices, with the goal of closing the gap to a living income. Furthermore, for its coffee, cocoa and cotton products, the REWE Group purchases raw materials certified through such schemes as Fairtrade, Rainforest Alliance / UTZ-, Naturland, GOTS and Cotton Made in Africa. The REWE Group is continuing to pursue this issue with those schemes that do not yet include the living wage and income as auditing criteria.

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