Dhaka, Bangladesh (BBN)– Swedish retailer H&M has announced it would encourage its suppliers to pay their workers through mobile money or other digital forms to improve the livelihoods of its workforce, enhance transparency and cut factory costs.
The move came following the company’s joining the ‘Better Than Cash Alliance’, a United Nations-based partnership of governments, companies and international organisations accelerating the transition from cash to digital payments, according to a statement issued by the Alliance.
“Digital payments are an efficient and scalable way to improve the lives of the employees of our suppliers. They offer a faster, safer and more transparent way to receive their salary, increase financial inclusion and support women’s economic independence,” Gustav Loven, Social Sustainability Manager at H&M group, said in the statement.
“Also, for our suppliers, paying wages digitally can generate savings, increase security and provide more accurate data on wages,” it quoted Gustav Loven as saying.
“H&M group is taking a bold step in recognising how cash-heavy supply chains limit efforts to empower workers and prevent companies from increasing transparency. And, it’s inefficient,” said Ruth Goodwin-Groen, Managing Director of the Alliance.
“H&M group’s leadership will help inspire other companies in the industry, and beyond, to make the shift to digital payments and contribute to inclusive growth, as well as to the Sustainable Development Goals, in emerging markets.”
As most part of the benefits will be realised by female workers, this move is a prime example of a corporation working to achieve the SDGs on gender equality (SDG-5) and decent work and economic growth (SDG-8).
Some 65 per cent of the 1.6 million people employed along H&M group’s supply chain including in Bangladesh were women, many of them with limited access to the financial services they need to create a better life for themselves and their families.
H&M group joins 55 other Better Than Cash Alliance members, and will have access to the knowledge and technical expertise offered by the Alliance and its members to accelerate the shift to digital payments, helping to advance economic growth and expand financial inclusion.