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 several, 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. 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. In 2019, we joined the SLCP Council.
We also enrolled some of the facilities we source from in the pilot and supported the broader pilot covering over 123 facilities in two countries. The final version of the tool was developed and launched in China and Sri Lanka in late 2018, with 15 of our approved facilities and mills encouraged to participate. We aim to support the expansion and sectoral adoption of the SLCP and are investing significant resources to institutionalize it across our supply chain to promote supplier ownership of social performance.
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, and Nicaragua.
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.
We also worked closely with Better Work to help found the Better Work Academy, which provides training and advisory services to global assessment staff. Their approach looks to move beyond “assessment only” facility monitoring and develop comprehensive solutions to improving industrial relations in facilities. The Academy has been operating for several years, and in 2018 several other brands joined. In the next year, Better Work Academy is developing a leadership skills program, as well as curriculum for top management in the supply chain. We believe it’s important to include leadership in capability-building programs, which enables facilities to take action to address worker feedback provided through new grievance mechanisms.
BW assessed 238 – or 69 percent – of the factories that make our branded clothing in BW markets in 2018, including 90 percent of factories in Cambodia, 61 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|
Supervisory Skills Training
Together with Better Work, we launched the Supervisory Skills Training (SST) program to reach a key group of employees we have not yet engaged: mid-level managers. This program aims to help facility managers improve their communication with workers, who typically contact middle management first to discuss problems or make suggestions to improve facility working conditions.
SST is designed to give supervisors and middle managers a deeper understanding of important leadership and supervisory concepts. Participants are trained to avoid a passive or authoritarian style of leadership, and to strike a fair balance between the interests of the company and the interests of staff. As a result of this training, we expect the participating supervisors to change their management style from “timid” or “domineering” to “professional,” which will result in better production efficiencies due to higher worker motivation and retention.
SST is a three-day (24 hours total) training program that covers areas like being a professional supervisor, building good relationships, influencing, and managing workers. During 2018, our team trained 439 supervisors from 31 facilities in seven countries. We continue to expand the trainings to more supervisors and facilities, with a target to reach 50 more facilities in 2019. In Better Work countries, we also encourage our facilities to nominate their supervisors in SST.
A program evaluation methodology has been designed and tested and will be implemented starting in 2019. Through supervisor and worker surveys and production efficiency data from the facilities, this program evaluation will help us to measure the extent to which participants reported the trainings to be effective, the extent to which they learned new concepts; if this learning led to any behavior change, if the change in behavior was also acknowledged by the workers, and if behavior changes impact production efficiency. Data will be tracked over 12 months and initial results will be available by the end of 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.
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.
Our Workplace Cooperation Program (WCP) facilitates dialogue between workers and management to address workplace issues, from overtime and worker well-being, to washroom sanitation and better quality of food in the canteen. This training program works with elected bipartite committees comprising both workers and management representatives who collaborate to build good industrial relations. Inherent in this training program is a recognition that workers in many facilities do not feel comfortable voicing their grievances in the presence of upper-level management. Our approach, designed in partnership with ILO Better Work, seeks to address those relations by developing the skills of committee members and guiding effective meetings. We also provide guidance on how to best respect and abide by workers’ fundamental rights at work, as enshrined in the ILO’s Core Conventions.
In 2018, we expanded and refine the program, as well as analyzing data that we collect quarterly. Since launching the program in 2016, we have reached 129 facilities — 67 in 2018 — in 10 countries. We continue to expand to our strategic vendors’ owned and subcontracted facilities, expanding the possible locations to bring wider impact. Our goal is to reach 200 facilities by 2020.
One of the ways we refined the program was to offer an abbreviated training period, moving from two years to 12 to 16 months. Now facilities have more flexibility in offering the training modules, as teams have the option to combine two half-day training modules into a one-day training to reduce time for program completion.
In addition to revising the training duration, we continued our use of data assessments to examine how many grievances have been received and addressed, which channels were used for grievances, and how long it took to address the issues. Our preliminary analysis shows that once functioning bipartite committees are in place, workers feel more empowered to raise concerns and that these concerns are more quickly addressed. In addition, our data show that once these committees have been trained, grievances rise for a period and then diminish in frequency, illustrating the comfort workers feel in voicing complaints and the subsequent actions taken to address their concerns.
Since part of our aim with this program is to help improve our suppliers’ business performance, we have begun collecting data to analyze whether the WCP is impacting productivity, efficiency and quality. We created a quarterly data-collection tool and are asking participating facilities 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 whether there is a correlation between the program and business benefits, and hope to have impact results that will allow us to refine and expand the program.
Workforce Engagement Program
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.
By the end of 2018, we reached 18 facilities by supporting mobile-engagement tools, building on lessons from our 2017 technology-enabled pilots. This builds on the 100 facilities that we had reached previously. Throughout the years, we have learned from our experiences engaging workers, and have adjusted our approach to better fit the needs of individuals, their workplaces and our business.
Today, we focus on a vendor-led model that leverages scalable mobile technology, allowing workers’ voices to be directly by those able to respond. We are also sharing best practices across vendors, from Vietnam to China to Indonesia to Guatemala, to sustainably expand the program.
Gap Inc. hosts WEP vendor workshops in each region to bring together our vendors and WEP service providers offering services in the region. During these workshops, our Supplier Sustainability team shares the importance of worker engagement and how it can help our vendors’ business. Research on worker engagement supports supplier adoption. Improved engagement has been correlated with business outcomes like reduced absenteeism and turnover, and vendors can learn from their workforce to make improvements that are good for business, whether that’s identifying a problem before it escalates or becomes a large risk, or hearing workers’ ideas about opportunities to improve efficiency, safety and more.
We are currently working with other brands and BSR in the Maximizing Worker Engagement Working Group to develop an enabling environment for a supplier-owned model of worker engagement that can be adopted and promoted across the industry. The working group’s goal is to bring together like-minded brands across the apparel and footwear sector to adopt guiding principles to establish a system that puts workers at the center of engagement and well-being.
In August 2018, we co-released Verite white paper highlighting the program’s return on investment, lessons learned, and case studies to drive broader industry awareness of supply-chain worker engagement. The insights and lessons from that report continue to drive the technology-based approach that we are pursuing today.
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.
Digital Wage 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. As of the end of 2018, 80 percent of our suppliers were using digital wage payments.
Our 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 support our commitment, we joined the UN’s Better Than Cash Alliance (BTCA) in 2018. BTCA works with the private sector, governments and international organizations to accelerate the transition to digital payments, which can help reduce poverty and support inclusive growth. We define digital wage payments as mobile wallets, bank accounts, debit cards and other methods that are digitally accessible. 20 percent of our suppliers still use cash payments, which can present a variety of security risks to workers and contribute to financial exclusion. Globally, more than 30 percent of working-age adults lack access to formal financial services. Rates of financial exclusion are higher among women, who comprise about 80 percent of the garment-industry workforce.
By committing to work with our suppliers to use digital wage-payment methods, we hope to increase the number of people in our supply chain – particularly women – who have access to formal financial products and services, including bank and savings accounts, credit and insurance. This will give workers greater control over their finances and offer them a safer way to save, spend and invest their money. Our suppliers will benefit from cost savings via a faster, more efficient payment system. Digital wages will also help increase accountability and transparency across the garment sector.
We are also evaluating how we can tie our digital wage-payment work to financial literacy training programs, which our P.A.C.E. program provides. We recognize that providing financial access to individuals in developing countries is only one piece of the puzzle; another crucial piece is helping to ensure that workers can effectively use those resources.
Further, we are working with a broad set of actors to develop country-level working groups in countries that presently lack the infrastructure or capital investment required to make digital wages a scalable, cost-effective model for garment workers. We have begun an initial partnership with the Bill & Melinda Gates Foundation and BSR in Bangladesh, in tandem with other international buyers, to identify solutions that can help us address some of the key systemic barriers to digitization in the years ahead.