Levi Strauss revamps supply chain strategy

Levi Strauss is to adopt new terms of engagement for its global supply chain in an effort to ‘move beyond compliance’ and ensure it has a more positive impact on the lives of workers in factories that supply it.

As part of the approach, Levi Strauss will require contract factories to ‘help make employees’ lives better’ by supporting programmes consistent with the United Nations Millennium Development goals.

The exact details of the terms of engagement will be developed through a nine-month consultation process with NGOs, other brands, trade unions and suppliers worldwide. Levi Strauss will then release a white paper for public comment and will begin implementing the new terms of engagement with suppliers in May 2012.

Chief executive John Anderson said the revised terms should lead to ‘a new apparel industry standard of social, economic and environmental sustainability that focuses on improving workers’ lives’.

He emphasized: ‘If our ultimate goal is to improve not just factory conditions, but to make a material difference to the people and communities in our supply chain, then we need a more holistic approach and a more human perspective.’

Levi Strauss’s original terms of engagement for suppliers were produced 20 years ago, and – claims the company – were considered pioneering at the time.

However, it concedes it needs now ‘to do more to create progress and move the industry forward’.

Anderson said focusing on compliance had pushed the company into two areas – ‘a legalistic standard of “do no harm”, and factory-level monitoring and reporting’, both of which are no longer necessarily the best ways forward.

He said: ‘While we’ve made progress in a number of areas over 20 years, the hard truth is that we haven’t made enough progress on improving the everyday lives of the people who make our products.’

By aligning itself with approaches that support the UN Millennium Development Goals, the company will concentrate specifically on improving maternal and child health; combating HIV/Aids and other diseases; Promoting gender equality and  empowering women; eradicating extreme poverty and hunger; and  ensuring environmental sustainability.

Levis Strauss says revising the terms of engagement is not only ‘the right thing to do’, but will also be good for business.

 ‘We are sure that if companies focus not just on the minimum legal requirements, but on a broader vision of social, economic and environmental sustainability, they will be rewarded,’ said Anderson.

The company is one of the world’s largest brand-name apparel businesses. It has 482 stores in 31 countries and had a $4.4billion (£2.7bn, €3.1bn) turnover last year.