Image: female garment workers in Bangladesh. Image source.
H&M is a company that’s worth US$21.08 billion and much of this money has been earned off the back of inexpensive fashion, for which human beings have reportedly suffered. But now, according to Quartz Media, the company wants to empower its female garment workers in Bangladesh. Calling for businesses and governments to stop paying people in cash and switch instead to digital payments, H&M has recently become the newest member of the Better Than Cash Alliance.
The Better Than Cash Alliance is a group of governments, international organisations, and companies hosted by the UN’s capital development fund and one of the things it advocates for is making the switch to digital payment methods. Quartz reports that this has the potential to deliver significant benefits to workers because digital payments leave a clear trail, promoting transparency and accountability throughout supply chains. They also help to ensure that people are being paid what they’re owed and reduce the risk of wage theft in general. Not only that, but this can also empower workers by giving them access to credit and savings accounts within the formal financial system.
“And then, of course, building an inclusive financial system works to build the foundations for an inclusive economy,” explains Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance. Even as digital payment options become increasingly common, she says, some markets are better prepared to make the switch than others. So it is with this in mind that the alliance has been working mostly with governments so far, though it has now begun to bring certain companies on board as well.
Coca Cola and Mexican baked-goods giant Grupo Bimbo are both members of the Better Than Cash Alliance, with H&M becoming the first fashion company to join. As one of the Bangladeshi garment industry’s biggest customers, this makes a great deal of sense, given that the retailer offers significant leverage in guiding the practices of suppliers in the country. At least it does in theory — although previous attempts to hide behind its suppliers haven’t exactly been a great indication of this so far.
Ultimately, H&M’s membership with the alliance is a good sign for worker’s rights in the garment industry. According to a study by the Better Than Cash Alliance of Bangladesh’s garment industry, 90% of salaries paid by Bangladeshi businesses are still being made in cash, despite the fact that digital payments could save factories both time and money. This is likely to have a particularly significant impact for female garment workers, who make up 65% of the 1.6 million people employed along H&M’s supply chain alone.
“If you think about having to take cash home in your pocket or on your phone or on a bank-account card, which do you think would be easier for a mother-in-law, or a husband, or a brother, or anyone else to get access to?” Goodwin-Groen asks, saying that digital payments give women greater control over the money they earn. “For many women in particular, having a financial identity and being part of the financial system is a first step to social inclusion. This is the beginning of a broader inclusion agenda for women and other clients or workers.
This post originally appeared on our sister site Well Made Clothes, where you can buy clothes that look good and are good.