Boohoo May Link Executive Bonuses to Workers’ Rights

Boohoo is a British fast-fashion company. (Wikimedia Commons)

Boohoo is a British fast-fashion company. (Wikimedia Commons)

Online fashion retailer Boohoo may link executives’ bonuses to new Environmental, Social and Governance (ESG) improvements. Announced on April 17, the plans are an important step in furthering sustainability within the fashion industry, particularly in terms of large, online brands. The proposed improvements are part of large reforms within the retailer to improve their sustainability following a recent scandal.

In September, an independent review found major failings in Boohoo’s supply chain after allegations of low pay and harmful working conditions at factories in Leicester, England. Additionally, executives were accused of having known about the issues within their factories since December 2019. Previous criticism leveraged against the brand condemned Boohoo for its bonus schemes, which would give large sums of money to founders and executives if the share price rose. 

Following these findings, the company began to tackle the problem by solving issues within its supply chain. They also published a list of suppliers in an effort to improve transparency. The spotlight due to the supply chain scandal has encouraged further developments on sustainability and accountability. Their annual report will lay out the plan in greater detail, which will be published in May.

Along with the attempts to recover from the previous scandal, U.K. lawmakers have advocated for changes in Britain’s fast-fashion industry, influencing the changes of the company. Parliament’s Environmental Audit Committee first recommended the improvements in December to Boohoo executives. The new plan utilizes these recommendations to create more accountability within the company, aimed at improving workers’ rights and the climate impact of the company. 

The chairman of the Committee, Philip Dunne, applauded Boohoo’s improvements but offered a word of caution: “Boohoo needs to demonstrate that it is delivering verifiable improvements in workers’ rights and the climate impact of its products." He cited previous horrible allegations of modern slavery in the supply chains and lack of COVID-19 precautions

Initial suggestions for supply chain developments seem to be on the right track for improving sustainability in fashion. While there are many additional improvements that are still needed, the move may influence other large brands to take similar steps to improve working conditions and overall sustainability. The fashion industry remains one of the largest polluting industries, causing major environmental damage. Improving bonus schemes to account for sustainability may not solve this issue, but is an important step in moving the fashion industry toward accountability and sustainability.