Build a Just and Inclusive Economy

Wage and Benefits Equity

Provide all direct employees and contractors equal pay and benefits for comparable work—helping to close the wealth gap for women, people of color and other historically disadvantaged and underrepresented groups. Pay at minimum a living wage, and create equitable access to comprehensive benefits for all.

Companies make a public commitment to provide all direct employees and contractors equal pay for comparable work, paying at minimum a living wage, and to create equitable access to comprehensive benefits for all individuals by 2030. In 2020, companies will: 
 

  • Assess where current business practices in hiring, advancement, rewards, and access to opportunities and benefits may be in opposition to achieving equal pay for comparable work, in particular for women and other historically disadvantaged and underrepresented groups   

  • Engage constructively with employee representatives to ensure workers’ voice is considered in the establishment of equitable wage practices 

  • Identify and eliminate any situations of subminimum wage payment, with particular attention paid to employees or contractors with disabilities

  • Evaluate the effectiveness of existing benefits packages in helping employees build financial security and prepare for unforeseen economic events, examining contributions to retirement plans, health insurance, Social Security and Medicare taxes, unemployment and disability insurance, dependent care and the provision of paid family and medical leave 

  • Assess and identify existing or potential gaps in equitable access to pay and benefits for all employees including contractors, with a specific consideration of how the effects of discrimination may intensify for employees that identify with multiple historically disadvantaged and underrepresented groups (e.g. gender, race, ethnicity, disability, sexual orientation, socio-economic status, etc.)

  • Leverage assessment results, as well as internal and external stakeholder engagement, to create an action plan designed to address existing gaps and inequities and to set concrete and measurable interim targets for improvement

In pursuit of providing all direct employees and contractors equal pay for comparable work and paying a living wage, with equitable access to comprehensive benefits, to all individuals, in 2025 companies will:
 

  • Establish a concrete methodology for determining a living wage in all areas where the company operates, identifying the feedback loops that will help maintain a living wage over time

  • Demonstrate how the company is investing and adopting new solutions to address the existing gaps and inequities identified, as well as issues related to access for both pay and benefits, evaluate the effectiveness of these solutions and expand the application of successful strategies and programs to include additional locations and parts of the value chain

  • Disclose progress against the interim targets set toward the ultimate achievement of providing equal pay for comparable work that is at minimum a living wage, and equitable access to pay and comprehensive benefits 

  • Confirm that no employees or contractors are paid subminimum wage

By 2030, companies provide all direct employees and contractors with equal pay and benefits for comparable work. Companies demonstrate that all direct employees and contractors are paid at minimum a living wage that is supported by a concrete methodology set in the context of where the company operates. Companies provide equitable access to pay and comprehensive benefits that are reflective of the unique needs and experience of employees and contractors based upon their identity (e.g. gender, race, ethnicity, disability, sexual orientation, socio-economic status, etc.) and importantly how those may intersect. 

Multi-stakeholder Collaboration for a Living Wage

A living wage not only seeks to ensure employees can support a decent standard of living, but is also critical for addressing widespread challenges of inequity. In addition to individual corporate commitments to pay employees a living wage and extending that requirement to their contractors, companies must also seek to enable an environment in which paying a living wage is a standard practice of business. 

Through collaboration with peers within and beyond its sector, contractors, suppliers, labor unions, employees and civil society, companies can contribute to the development of an industrywide system for engaging workforce representation so that workers within an industry and specific country can negotiate their wages under the same conditions, regardless of their employer. Leveraging multi-stakeholder collaboration, companies can also establish a pre-competitive framework for establishing country-specific living wages and meaningful benefits that are inclusive of the worker voice and experience in that particular region. 
 

Getting Started

This section of the Ceres Roadmap 2030 identifies the foundational steps companies can take to begin implementing the actions needed to build a just and inclusive economy.
 

✓ Engage Role Players

To capture the full breadth and depth of the risks and opportunities related to building a just and inclusive economy, companies should consider the role of various business units across the value chain and regularly engage with business unit leaders to analyze the intersection between human rights and human capital risks and opportunities and their processes.  Upstream, human rights and human capital related opportunities may take the form of engaging tier 1 and tier 2 suppliers to evaluate and remedy human rights impacts. Within operations, these opportunities may take the form of addressing the wage gap or providing unconscious bias training for employees. Engaging business unit leaders will uncover better solutions and make the process of establishing workforce accountability easier. Concurrently, business unit leaders and senior management need to establish fluid lines of communication and disseminate key risks and opportunities into clear messaging that will engage board members. Complementary board oversight and accountability from the top down will support the integration of sustainability priorities across the business, informing strategic and annual planning and ensuring the proper allocation of resources for achieving stated goals. 
 

✓ Connect the Dots

Building a just and inclusive economy starts by understanding the business’ fundamental relationship between people, labor and human rights.  Using the lens of saliency, which helps to identify those issues with the greatest potential for adverse impacts on people, and applying it to business strategy and decision-making, reinforces a company’s values and strengthens the fabric that holds the company together.  
 

✓ Establish Policies

Companies just getting started will want to first establish company wide policies that support the intention to respect fundamental human rights, applying the same commitment to both direct and indirect employees across the value chain. Corporate policies should align to the fundamental human rights as identified in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the Universal Declaration of Human Rights. These policies and commitments should then be made part of human rights and human capital management systems aligned with the guidelines set forth by the UN Guiding Principles on Business and Human Rights. 
 

✓ Build a Management System Designed for Evolution

While the policies and management systems are intended to be permanent, the reality is that human rights and the potential for impact to people across the value chain is constantly changing. Integrating salient issues into the risk assessment and decision-making processes is essential. However, decisions made outside of the company, by other parties and in other regions can have downstream impacts on the company and its people.  Therefore, specific processes, assessments and key performance indicators require periodic review to ensure there is accurate management and monitoring on what is most salient and an ongoing understanding of how impacts may evolve over time.
 

✓ Pay Taxes

To improve the foundation of our economic and social systems, companies should pay their fair share in taxes to make sure that funds are available to support equitable programs.  As disruptions impact the global economy, it is critical for governments to have the funds available to absorb shocks and invest in a sustainable path towards recovery.  When companies deliberately reduce their tax obligation, it helps their bottom line, but contributes to the fragility of the system as a whole.

Disclosing Progress

Disclosure establishes accountability, provides a foundation for engagement and serves as a platform for demonstrating priorities, process and progress. See the Transparency and Disclosure section of Ceres Roadmap 2030 on how to make all of your disclosures complete, credible and decision-useful.

The Global Reporting Initiative (GRI) Standards and the Sustainable Accounting Standards Board (SASB) are two disclosure tools widely recognized as standards for comparable sustainability disclosure. Disclosure related to corporate efforts to build a just and inclusive economy should also be guided by an additional disclosure framework that helps to strengthen corporate disclosure and meet the expectations of stakeholders, in particular investors: the United Nations Guiding Principles (UNGP) Reporting Framework. 

The UNGP Reporting Framework, published in 2015, provides comprehensive guidance for companies reporting on management approaches and systems for respecting human rights in direct operations and across value chains. Most significantly, the reporting framework introduces the concept of saliency, calling on companies to first assess priorities through the lens of risks to people (rightsholders) versus risks to the business. Through this change in perspective, companies are able to identify and act on the human rights challenges that present the most severe risks to people.

Supported by investor interest, companies should prioritize disclosure of the following specific metrics:
 

  • Equal Employment Opportunity Data - Year-over-year data collected on equal employment opportunity (EEO-1 Form for U.S. employees) disaggregated by gender, race, ethnicity and job category 
  • Wage Data - Data detailing wages, benefits and pay ratios, disaggregated by gender, race, ethnicity and job category
  • Tax Payments - How the approach to tax is embedded within the organization and country-by-country reporting of tax-related information for each jurisdiction in which the organization operates. For more information go to GRI 207: Tax Guidance.


Additional Disclosure Resources

Ceres: Disclose What Matters -  Analyzes the sustainability disclosures of the world's largest companies and can help companies bridge the gap and provide executable, relevant information to investors.

Workforce Disclosure Initiative - Provides a common set of questions through an annual survey for companies from all sectors to disclose their management of human rights and human capital issues across the value chain. The WDI platform allows companies to demonstrate to their investors, clients and other stakeholders how their approach to workforce management is aligned with their business strategy.

Resources

With respect to wage and benefits equity, there are many programs, resources and materials available to help guide companies. Below is a list of some key resources:

Future of Work Initiative - The Aspen Institute’s Future of Work Initiative is a nonpartisan effort to identify concrete ways to address the challenges American workers and businesses face due to the changing nature of work in the 21st century.

SHIFT: Living Wages - An interactive version of The Human Rights Opportunity report, prepared by Shift to offer a format that you can read and use online. Provides inspiration for how companies can harness innovation, leadership, influence and partnerships to tackle negative impacts in ways that maximize positive outcomes for people in line with the SDGs.

International Labour Organization’s Declaration on Fundamental Principles and Rights at Work - Adopted in 1998, the Declaration commits member states to respect and promote principles and rights in four categories: freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.

United Nations Guiding Principles on Business and Human Rights - Provides an authoritative global standard for preventing and addressing the risk of adverse human rights impacts linked to business activity.

Corporate Human Rights Benchmark - A collaboration led by investors and civil society organisations to assess 200 of the largest publicly traded companies in the world on a set of human rights indicators.

Companies in Action

Target announces pay raises, bonuses and new benefits amid coronavirus pandemic. The coronavirus crisis is taking a toll on the global workforce unlike anything else that we have experienced in recent decades. Industry leaders are recognizing employees for their work and stepping up with enhanced benefits. At Target, in response to the pandemic and in recognition of the valuable work conducted by frontline team members, the company announced a $300 million investment in wages, bonuses, paid leave and benefits. Among these, the retailer temporarily raised employee wages by $2 an hour, raising the minimum wage to $15 an hour and meeting the company’s target to reach this threshold by the end of 2020. This action puts Target on a path to paying its employees a livable wage, one step among many that is needed to fully respect workers' rights. In addition to the pay raise, the company will also provide free, safe and reliable backup care for loved ones and paid leave for team members. For employees with underlying medical conditions, who are pregnant or over 65 years old, the plan also provides a 30-day paid leave benefit.

PVH Corp. commits to achieving living wages for its workers through collective bargaining. Leading companies in the apparel sector are making bold commitments to achieving living wages.Their success is dictated in part by meaningful public-private partnerships that can scale impact. PVH has recognized this challenge and, in 2018, the company committed to advancing living wages in its supply chain as part of its broader sustainability strategy—Fashion Forward. The company has set a priority to create conditions for national living wage agreements through industry-wide collective bargaining. In support of this, the company has set a target that by 2025 all of its key suppliers in two of its priority production countries will proactively support collective bargaining to achieve living wages and that the company will expand that to all key suppliers across four of its priority production countries by 2030. In 2018, PVH was the first U.S. company to join ACT (Action, Collaboration, Transformation), a collaboration of global brands and retailers. The company that year also joined IndustriALL Global Union, a global union federation representing more than 50 million working people committed to achieving living wages for industry workers through collective bargaining linked to purchasing practices. As part of its membership, PVH commits to assessing and strengthening its business practices to enable suppliers to pay workers the agreed upon living wage and train global associates on the responsible sourcing expectations and buying practices to integrate commitments throughout the company. 

Gap Inc. fosters financial inclusion across its supply chain partners. A strong focus on supplier engagement and capacity building has been at the core of Gap's sustainability efforts for over a decade. More than 80% of the workers in the textile supply chain are women, and they often live in a cash-only environment without access to adequate financial services. Based on its commitment to empowering supply chain partners and fostering inclusivity, Gap announced a transition from a cash-based system to digital payments by 2020. While 60% of Gap' supply chain already operates with digital payments, this commitment aims to expand the reach across the company's global supply chain and draw previously unbanked workers into the formal financial system. Gap has partnered with the UN-based Better than Cash Alliance, a multi-stakeholder partnership that is working to accelerate the transition from cash to digital payments in an effort to address poverty and drive inclusive growth.

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