Living Wages and Income

The REWE Group sources a large number of products and product components through supply chains which can extended across multiple countries. Raw material production and processing involve a heightened risk of non-observance of labour and social standards – for example, in the payment of wages and income. Therefore, these supply chain links are the focus of REWE Group activities.

Living wages are a focus issue in the area of action of people within the Green Products Strategy 2030. The aim of efforts within the scope of this focus issue is to help improve the wage and income situation in supplier countries.

Background

A living wage must be high enough for workers and their families to have a humane living standard – this includes funding for food, water, accommodation, education/schooling, healthcare, transport, clothing and other essential needs – including a reserve for unforeseen events. In many countries, the statutory minimum wage is far below the poverty line. Since many self-employed workers such as small farmers do not receive a wage, but rather earn their income by selling their goods or services, the term “living income” has also be introduced. In this text, the definition applies to the net annual income.

Principles

The REWE Group is committed to ensuring that products are produced in their ranges with respect for human rights. All business partners of the REWE Group are contractually obliged to comply with minimum requirements, such as national and international laws and the core labour standards of the International Labour Organisation (ILO) and to acknowledge the Guidelines on Sustainable Business Practices. They cover matters such as compensation requirements and fair employee policies. For example, they stipulate that all companies in the supply chain must pay their employees the applicable national minimum wage regularly (at least monthly). The REWE Group reserves the right to apply sanctions when the values contained in the guidelines are deliberately and flagrantly breached. The REWE Group also takes responsibility for strengthening human rights and preventing abuses of human rights in its Declaration of principles on human rights.

Guidelines define the operational framework

In its Guideline on Fairness, the REWE Group has outlined its commitment to strengthening human rights and improving working conditions within the supply chains of all private label products of REWE, PENNY and toom Baumarkt DIY stores. In addition to child labour and forced labour as well as women in the supply chain, a living wage and income is a focus issue in the area of action of people. In its Guideline on Living Wages and Incomes, the REWE Group raises awareness with regard to the importance of a living wage and income in the supplier countries and identifies specific measures and goals. The guideline defines a binding operational framework for the REWE Group and its business relationships with contract partners.

Implementation

To support a living wage and income in the entire supply chain, the REWE Group pursues the overarching management approach for responsible supply chains (see Social Aspects in the Supply Chain).

Training and education programmes support implementation

Training helps suppliers and producers implement the requirements of the REWE Group and ensures continuous improvement. In various projects the REWE Group works directly with raw material producers to overcome the challenges. In cooperation with Fairtrade and four Fairtrade small farmer organisations in Brazil, the REWE Group is involved, for example, with training programmes designed to provide a better income as well as improved living and working conditions for small orange producers. In accordance with the principle of “helping people to help themselves”, orange farmers learn how to operate more efficiently and how to work in a more socially and environmentally conscious manner (also see Guideline on Juices).

Cooperation with stakeholders

The REWE Group encourages continuous dialogue with a large number of stakeholders and is involved in various national and international initiatives, alliances and forums. For example, the REWE Group is a member of organisations such as the Competitive Cashew Initiative, which aims to increase the competitiveness of the cashew value chain in selected African countries.

Along with other German retailers, the German Federal Ministry for Economic Cooperation and Development (BMZ) and the German Society for International Cooperation (GIZ), the REWE Group is part of the “German Retailers Working Group on Living Income and Living Wages” (see also A Living Wage for Banana Workers). In a first step, the activities of the working group are geared to global agricultural supply chains for the private label products of members. Together, the members have developed a voluntary commitment for this issue, which the REWE Group has signed. Through this, it pledges to be actively involved in the development and implementation of responsible business practices – in coordination and cooperation with all relevant stakeholders in its global supply chains. Measures taken in this regard include establishing the topic within the companies as well as conducting supplier surveys on sustainable procurement practices and knowledge of production conditions on site.

In 2020, the REWE Group teamed up with the German Federal Ministry for Economic Cooperation and Development (BMZ), the Christian Initiative Romero (CIR), and TransFair e. V. to found the Partnership for Sustainable Orange Juice (PANAO). The members are committed to actively promoting social justice, labour rights, occupational health and safety, and environmental protection in the orange juice supply chain. Brazilian orange juice production is the focus here. Together with the Sustainable Juice Platform, the REWE Group is also funding projects such as the creation of a living wage benchmark analysis for orange cultivation in Brazil. As a member of this European initiative, the REWE Group has already been championing social and environmental improvements in the supply chains of the fruit juice industry since June 2016.

Pilot projects to ensure a living wage and income

Through pilot projects in focus supply chains, the REWE Group wants to contribute to implementing measures and evaluating the resulting successes. As part of this, the commercial company has set itself the goal of trialling approaches to ensure a living wage and income by 2025 and, if these are successful, to upscale them. The first pilot projects have already been implemented: