Most Fashion Brands Fall Short on Living-Wage Transparency
Only four of 110 major clothing brands report that workers receive a living wage somewhere within their supply chains, according to the latest edition of Fashion Checker, a wage-monitoring initiative run by the global nonprofit Clean Clothes Campaign.
The report, released in September, highlights persistent gaps in wage transparency across the fashion industry, despite some progress in disclosing supply chain information. The brands assessed include Adidas, Chanel, Nike, Uniqlo and Zara.
While 41% of the companies surveyed disclosed at least some information about their supply chain facilities, representing a 28% increase compared with the project’s first edition in 2020, only 3% disclosed wage levels at those facilities.
The findings also reveal substantial gaps between workers’ actual earnings and the income needed to cover basic living expenses. Based on independently collected worker-survey data, garment workers in Bangladesh earn 73% less than the country’s estimated living wage. The shortfall reaches 74% in Pakistan, 63% in Serbia and 66% in Turkey.
Clean Clothes Campaign defines a living wage as income sufficient to cover the basic needs of workers and their families while leaving some money for discretionary spending.
EU Due Diligence Rules Put Supply Chain Wages Under Scrutiny
The findings come as large fashion companies prepare for increased accountability under the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), which is scheduled to bring relevant companies under its requirements starting in 2029.
Under the directive, companies are expected to use their influence to help ensure an adequate standard of living throughout their chains of activities, including by supporting living wages for employees.
Clean Clothes Campaign estimates that 30 of the 110 brands assessed will fall within the directive’s scope. The rules apply to EU companies employing more than 5,000 people and generating over €1.5 billion ($1.77 billion) in revenue, as well as non-EU companies generating more than €1.5 billion in EU revenue.
However, the nonprofit warned that the results suggest most of these companies remain poorly prepared to meet their obligations.
The report found that 32% of the brands surveyed have publicly committed to working toward living wages for everyone in their supply chains. Only 3% have published a time-bound action plan outlining how they intend to achieve that objective.
Few Brands Report Living-Wage Payments at Supplier Factories
The gap between public commitments and reported results remains particularly pronounced at factory level.
Devold, a Norwegian outdoor and performance apparel company, was the only brand to claim that at least 50% of its supplier factories pay workers a living wage, the highest proportion reported among the companies assessed.
Three other brands Puma, Zeeman and Schijvens reported that between 1% and 25% of their supplier factories pay living wages.
The remaining companies made no equivalent claim, including Inditex, the owner of Zara, as well as Amazon, H&M, Chanel and Adidas. According to the report, no public evidence was available to demonstrate that these companies’ suppliers were paying workers a living wage.
The broader trend has changed little since the initiative began. Aileen Robinson, Fashion Checker coordinator, said in a September 26 press release that brand living-wage scores had improved by only 3% since 2019. She added that 96% of brands currently fail to provide a living wage to any workers.
Robinson also told ESG Dive by email that many of the world’s largest fashion companies continue to record annual profits while workers experience little or no improvement in their pay, despite the approaching EU requirements.
She highlighted a recent Clean Clothes Campaign investigation indicating that major brands now pay 30% less in inflation-adjusted terms for a cotton T-shirt manufactured in Bangladesh than they did 25 years ago.
The report identified another weakness in worker protection: 25% of the companies surveyed do not provide a publicly accessible grievance mechanism through which employees can report concerns, including wage violations.
H&M defends its wages
H&M Group disputed the report’s assessment of its performance. “Our suppliers pay gross average wages that are higher than minimum wage levels in many countries,” Pernille Skanvig Schønau, Global Press Officer, told ESG Dive. She also referenced publicly available wage information from H&M.
But the company’s own sustainability information admits that minimum wages do not always suffice to meet the basic needs of the workers.
Schønau also spoke about H&M’s work with ACT Cambodia, a collaboration between brands and trade unions. The initiative recently led to a binding agreement with the IndustriALL Global Union in Cambodia, supporting collectively bargained wages and better working conditions across the garment, textile, footwear and travel-goods industries, she said.
But she argued that Fashion Checker does not accurately reflect the work done by H&M.
Bangladesh wage data shows the gap
H&M’s published figures show the difference between the average earnings and what is needed to live a decent life.
The company’s wage data shows that the average gross monthly wage in Bangladesh is 18,000 taka, or about $164 at current exchange rates. But the living-wage benchmark is 30,000 taka, or around $244 according to H&M’s figures.
“There is a huge gap,” Paul Roeland, transparency coordinator at the Clean Clothes Campaign, told ESG Dive, citing benchmarks from independent non-profit Wage Indicator.
Roeland also challenged the use of the term “Gross Average Wage” and argued that H&M should clarify the definition of the figure, as it could include overtime payments.
Many garment workers rely on overtime to survive, he said, citing recent field research by Clean Clothes Campaign in Bangladesh. However, earnings derived from extra hours should not be regarded as a living wage which should be attainable within a normal working week.
Industry Agreements’ Effect Under Attack
Roeland also questioned the practical results of the ACT agreement used by H&M. He said the initiative had led to a monthly pay increase of $6 in Cambodia and only at a few factories.
He said H&M and other apparel companies often point to select initiatives, pilot projects and roadmaps, without showing real progress in the day-to-day lives of workers.
Overall, the report’s findings highlight a persistent challenge for the global fashion supply chain, in that public commitments to fair wages have not consistently been reflected in measurable pay improvements at the factory level.
As EU due diligence requirements loom, brands are under growing pressure not just to show adoption of responsible sourcing policies, but also that their suppliers pay wages that can meet workers’ basic needs.
