Boohoo can link boss pay to environmental and social improvements Business News

Boohoo told MPs he would examine the possibility of linking bosses ‘bonuses to environmental, social and governance improvements after a damning report found evidence of widespread labor abuse at some of the companies’ suppliers.

Executive Chairman and Founder Mahmud Kamani said the potential move is being considered by Boohoo’s board and more details will be released next month in the group’s annual compensation report.

“Our teams are working intensively to bring about lasting change, strengthening our supply chain governance and internal processes,” Kamani wrote in a letter to the Environmental Audit Committee (EAC).

“I sincerely believe that these efforts will have a positive impact, not only on our own suppliers, but on the standards of apparel manufacturing in the UK as a whole.”

CAE said it believed linking executive pay to ESG improvements would demonstrate a real commitment to environmental and social responsibility.

Last month, Boohoo released a list of its suppliers launching a transparency initiative.

The company has come under fire for allegations that a number of its suppliers making clothing in Leicester were paying workers significantly less than minimum wage.

A review by Alison Levitt QC found that senior Boohoo executives knew “for a fact” that there were “serious issues” with the treatment of workers at the company’s Leicester factories from December 2019 to later.

Ms Levitt QC, who was hired by the company to review its practices, said she believed reports of poor working conditions and low pay rates at garment factories were “substantially true”.

However, Ms Levitt said she found no evidence that Boohoo or his agents committed any criminal offenses.

The Chairman of the Environmental Audit Committee, the Right Honorable Philip Dunne MP, said: “Boohoo’s response to our committee’s letter sends promising signals that we are reaching a turning point in the fast fashion awareness of its environmental and social responsibilities.

“It’s good news that the board is considering aligning executive bonuses with ESG improvements, and I look forward to seeing if that goes forward.

“Bonuses shouldn’t just be linked to meteoric growth. Boohoo must demonstrate that it is making verifiable improvements in terms of workers’ rights and the climate impact of its products. “

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This notice was published: 2021-04-24 08:11:09