The global apparel industry has been forced to face some tough and unpleasant realities in recent years, and has been criticized for engaging in a “race to the bottom” especially as it relates to the conditions under which some garments are manufactured.
At Levi Strauss & Co., we long ago decided that maintaining strong labor, environmental, health and safety standards with our vendors was a priority. In 1991, we were the first multinational apparel company to establish a comprehensive workplace code of conduct — Terms of Engagement (TOE) — for our manufacturing suppliers. Today, our TOE are supported by a program to assess how well our vendors are meeting our standards and, when we identify problems, how to improve.
Over the years, we’ve seen the industry adopt codes of conduct and make strides to increase transparency about where products are made and to improve conditions of workers in those places. However, creating more significant, industry-wide change will require testing fresh approaches. We must find new ways to reward and incentivize vendors who demonstrate best-in-class practices.
That’s why we’re honored to be working with the World Bank Group’s International Finance Corporation (IFC) on their Global Trade Supplier Finance (GTSF) sustainability incentive program. This innovative new initiative offers financial incentives to garment manufacturers who perform well on sustainability metrics.
The GTSF program presents an exciting evolution of our work. We expect that the financial benefits offered through the program will incentivize our vendors to make further improvements to their sustainability performance. And, if the GTSF incentive program is successful, we hope the IFC will expand it to the rest of the industry. These continued investments have the potential to create ripple effects throughout the economies of developing countries.
We’re hopeful that our predictions will ring true. For us, success will be achieved when this type of program is scaled across the industry to other brands, retailers and vendors. Our goal is to create a “race to the top” that everyone in the apparel industry can win.
This post originally appeared on The World Bank Voices blog.
ABOUT THE AUTHOR
David Love is the Chief Supply Chain Officer for Levi Strauss & Co. (LS&Co). In this position, Love is responsible for the development, sourcing and delivery of worldwide LS&Co. products from concept to our distribution centers. Love leads the company’s owned-and-operated production facilities and contracted production in more than 500 suppliers across 45 countries. Additionally, Love is responsible for the company’s worldwide Terms of Engagement and Environment, Health and Safety. Love is a member of LS&Co.’s worldwide leadership team, an executive forum of the company’s senior-most management. During his 23-year career with LS&Co., Love has been a key player in transforming the company’s global sourcing capability and driving operational excellence.