Supplier Partnerships Improving working conditions to benefit people and our business
Addressing the systemic challenges of the apparel industry requires collaboration. We embrace this approach by working closely with our suppliers to build their capabilities, by joining industry-wide efforts to share best practices and improve efficiency and by partnering with local and international NGOs on innovative programs that benefit workers.
We strive to consistently innovate in our approach to working with factories, and take a holistic approach to improving labor standards and working conditions.
Empowering Our Strategic Suppliers
We partner with the facilities where our products are made to help them become preferred employers in the communities where they operate. This supports workers and can benefit business by driving higher retention and improved productivity. To achieve this, we take a multipronged approach to building our suppliers’ capability.
To cultivate long-term, close relationships that allow us to create greater change together, we are working with a smaller number of strategic suppliers. Over the past five years, we have streamlined our approved list of facilities from more than 1,200 to approximately 800. With those suppliers, we develop shared sustainability goals and work with them to measure and improve performance.
Beginning in 2016, we disclosed the names and locations of factories that manufacture our branded products. This list is updated on a biannual basis and as needed. The factory list can be found here.
Our Tier 1 suppliers are trained on our COVC on an ongoing basis. Beginning in 2017, we implemented our redesigned Mill Sustainability Program to measure the social and environmental performance of our Tier 2 mill suppliers. We are using the Sustainable Apparel Coalition’s Higg Facility Environment Module 3.0, the Zero Discharge of Hazardous Chemicals Roadmap to Zero Program (ZDHC), and the Social and Labor Convergence Project’s Converged Assessment Framework in our effort to improve our mills’ sustainability performance. We also engage many suppliers more deeply through industry-leading programs such as P.A.C.E., our Workplace Cooperation Program and our Workforce Engagement Program.
To help our suppliers make strategic investments in their employees and business operations, we have increased their access to data and analysis from our Assessment and Remediation program. Over time, we will also disclose on each supplier’s involvement in various Gap Inc. programs and their areas of opportunity for improving performance. We believe that as suppliers take more ownership of their sustainability programs, they will realize the business benefits and will require fewer external assessments and incentives.
Our Assessment & Remediation Program continues to evolve, through our partnership with ILO Better Work, and through our participation in the Social & Labor Convergence Project.
Social and Labor Convergence Project
The proliferation of duplicative assessments and their associated protocols consume time and resources that suppliers could use to create real progress in their workers' lives. We believe streamlined approaches to measuring social and environmental performance can support systemic progress and make it easier for more businesses to improve their social and environmental performance.
That’s why, in 2015, Gap Inc. became a signatory to the Social and Labor Convergence Project (SLCP), a collaboration among apparel and footwear brands, retailers, industry groups and civil society organizations. As a signatory to this collaboration, we support the use of a new shared data-collection tool that can assess the social and labor performance of manufacturing facilities across the apparel and footwear supply chain. In 2017-18, Gap Inc. chaired both the SLCP Tool Development Working Group, and the SLCP Verification Working Group, in which we helped facilitate the creation of the first SLCP tool and verification process. Initially, we are launching the tool in China and Sri Lanka, with 20 of our approved facilities and mills encouraged to participate. Our aim is for all approved facilities and mills manufacturing for Gap Inc. to adopt this tool globally.
ILO Better Work
As part of our efforts to go above and beyond assessment and remediation and work more collaboratively with our suppliers and other stakeholders, we have played a leading role in multi-stakeholder collaborations such as the ILO’s Better Work (BW) program. Better Work takes an advisory approach to working with facilities, with an emphasis on protecting workers’ rights and well-being by helping companies and governments uphold the ILO’s core labor standards and national labor laws. Better Work leads facility assessments and helps address and remediate issues in Vietnam, Cambodia, Indonesia, Bangladesh, Jordan, Haiti, Nicaragua and Lesotho.
We have partnered with Better Work since its founding, and today we collaborate in a variety of ways: We partner with them on advisory services in eight of our sourcing countries and we advocate for other buyers to adopt Better Work’s assessment reports instead of duplicating assessments. Previously, we set goals to have 70% or more of facilities in ILO Better Work markets participate in the Better Work program. Our goal now is to enroll 100% of our eligible facilities in Better Work countries in the program by the end of 2018.
We also partnered with Better Work on our Workplace Cooperation Program, and in 2018-19 are launching two new partnerships: the first is based on their Supervisory Skills Training program, the other on working with our facilities to prevent sexual harassment and discrimination.
BW assessed 210 – or 59 percent – of the factories that make our branded clothing in BW markets in 2017, including 80 percent of factories in Cambodia, 54 percent in Vietnam, and 62 percent in Bangladesh.
Factory Assessment & Remediation in Better Work Markets (2017)
|FACTORIES AUDITED BY BETTER WORK||FACTORIES AUDITED BY GAP INC.|
|Country||# of factories||% of factories||# of factories||% of factories||Total|
Workplace Cooperation Program
We believe that improving dialogue and relations between workers and management can help prevent labor disputes, resolve problems, give greater voice to workers and improve productivity and competitiveness.
In 2015, we evolved our partnership with Better Work and put our Supplier Sustainability team of approximately 50 individuals through their Workplace Cooperation Program curriculum training. This program gives workers and managers the skills they need to resolve workplace issues, engage in collaboration and drive continuous improvement in the workplace. Operationally, we help train committees of workers and managers to develop sustainable solutions and share best practices for workplace challenges – ranging from issues such as establishing grievance mechanisms to educating all parties on how to improve industrial relations in their workplaces. Through this program, our Supplier Sustainability team also trains workers and managers on how to run effective, collaborative discussions to promote improved dialogue between workers and management.
Our goal is to enroll 200 factories in this program by 2020. By the end of 2017, we have reached 118 facilities in nine countries, training 1,173 workers and managers, representing more than 125,000 workers. We have also begun using new data assessments to better understand the benefits of the program and areas for improvement. This has included quarterly qualitative surveys to better understand the experience of workers and managers, including how they perceive the effectiveness of the bipartite committee in making decisions, whether they feel comfortable sharing issues and complaints, and how they describe the quality of the relationship between workers and managers. We are also collecting data on a quarterly basis to analyze whether the Workplace Cooperation Program is improving productivity, efficiency and quality. We are asking participating factories to track and share their data on different business indicators, such as absenteeism, number of grievances, productivity and more. We are working with Better Work to conduct an independent impact assessment of the program, examining if there is a correlation between this program and business benefits.
In 2018, we partnered with ILO Better Work to implement a new training module to reach a key group of employees we have not yet engaged in the program: mid-level managers. Through this Supervisory Skills Training program, we aim to help middle managers improve their communications with workers, who typically contact middle management first when they want to discuss problems or make suggestions to improve factory working conditions.
We also plan to launch a new program, also in partnership with ILO Better Work, focused on addressing gender-based discrimination and sexual harassment in the workplace. This program will focus on a broad set of trainings and workshops, and will begin in 2019 in Bangladesh, Cambodia, Indonesia, and Vietnam. We plan to take learnings from this program to additional key sourcing markets beginning later in 2019.
We continue to scale our Workplace Cooperation Program, helping train committees of workers and managers to develop sustainable solutions and share best practices for workplace challenges.
Workforce Engagement Program
In addition to ensuring that the people who make our clothes work in safe, fair conditions, it is crucial that they feel valued and engaged at work. Research has shown that employee engagement enhances workers’ sense of well-being, and can also demonstrate positive business outcomes. According to Workplace Research Foundation, highly engaged employees are 38% more likely to have above-average productivity, and suppliers that invest in workers receive a three-to-one return on their investment.
In 2015, we launched our Workforce Engagement Program with Verité, a leading NGO with deep expertise in improving working conditions in the garment sector. The goal of the program has been to measure and improve the degree to which garment workers feel valued and engaged at work, by giving workers an opportunity to provide anonymous feedback on key topics such as supervisor relationships, grievance mechanisms, and training and development opportunities.
We collect information on worker engagement through surveys, focus groups and one-on-one interviews. This provides a cross-section of both quantitative and qualitative data, from which our field team derives insights. After two years of implementation with Verité, we began deploying delivery of this program through interactive technology solutions which provide opportunities for workers and management to engage on an app, and for factories to improve their overall human resources practices using technology (i.e. pay stub information on the app, as well as training on the app and survey functionality).
We help our suppliers analyze the workforce-related insights to create tailored recommendations they can use to make investments in their employees. This analysis also informs training programs for facility managers, as it serves as the basis for our Supplier Sustainability team to develop tools for facility managers to increase workers’ satisfaction, knowledge and overall well-being.
Our Workforce Engagement Program is now being delivered digitally, and we’re supporting our strategic suppliers in their efforts to use mobile technology to engage their employees.
In 2016, we created an Engagement and Well-Being Toolkit for suppliers, which is meant to provide them with resources that can help them improve various workplace-related issues. Examples of this include team-building activities, supervisory skills trainings and investments in well-being infrastructure, such as building daycare centers on site to help working mothers.
We have found that the program supports both social and business objectives: For workers, it enhances well-being by helping facility managers listen to and act on their concerns and ideas about improving the workplace. For management, giving workers better benefits and resources at work can help increase productivity, improve retention and lower absenteeism. The program also benefits our business by promoting an ethos of continuous improvement among our suppliers. And by delivering best practices and recommendations to our suppliers, the program is helping us meet our goal for all strategic suppliers to achieve a sustainability rating of green or yellow by 2020.
A 2018 Verite white paper highlighted some case studies underscoring the benefits of the program to workers and business. The analysis found that in facilities where significant management improvements were made on top drivers for worker engagement such supervisors’ training, communication, training and career development, workers’ sense of value and their engagement improved. This also resulted in positive business benefits. Simultaneously, when facility management chooses not to act upon the insights revealed in these assessments, little improvement is observed by workers.
As we evolve the program, we will continue to find ways incentivize supplier ownership of this approach. We will continue to help facility managers understand that this is not a compliance-related exercise, but is rather a program that complements traditional assessments by focusing solely on the workforce as an asset. Further, we will seek to deepen our partnership with other companies operating similar programs, namely through the BSR Working Group on Worker Engagement, by sharing best practices and seeking to align worker well-being and engagement tools.
In addition to ensuring that the people who make our clothes work in safe, fair conditions, it is crucial that they feel valued and engaged at work.
All of our tier 1 suppliers will make the transition from a cash-based system to digital payments by 2020.
Moving to Digital Payments
In a move to improve the livelihoods of garment workers and help improve supply chain transparency and efficiency, in early 2018 we announced a goal for all of our tier 1 suppliers – approximately 800 factories in about 30 countries – to make the transition from a cash-based system to digital payments by 2020.
More than 60 percent of Gap Inc.’s supplier factories already provide digital payments methods, such as online transfers to bank accounts or mobile wallets. The new goal will help scale this progress across the company’s global supply chain and positively impact the lives of more than one million garment workers.
Electronic wage payment methods have the benefit of drawing previously unbanked workers into the formal financial system, allowing them greater control over their finances and a safer way to save, send money, and invest. At the factory level, suppliers benefit from cost savings, due to increased efficiency and speed. All parties also benefit from increased accountability, transparency, and security.
To help achieve this commitment, we joined the United Nations-based Better Than Cash Alliance, a partnership of governments, companies, and international organizations that accelerates the transition from cash to digital payments in order to reduce poverty and drive inclusive growth.
For over 10 years, Gap Inc. has promoted financial literacy and inclusion through our life-skills education and training program for female garment workers, P.A.C.E. (Personal Advancement & Career Enhancement). The program’s holistic curriculum also includes topics such as communication skills; time and stress management; problem solving and decision-making. P.A.C.E.’s evaluation results have demonstrated that the program directly improves the lives of women and their families by developing women’s knowledge, skills and confidence. The program also has a strong track record for reducing garment worker turnover and absenteeism, a key return on investment measure for suppliers that participate in P.A.C.E. across 16 countries.