In a move to improve the livelihoods of garment workers and help improve supply chain efficiency, Gap Inc. has announced a new goal for all of its tier 1 suppliers, approximately 800 factories in about 30 countries, to make the transition from a cash-based system to digital payments by 2020. Gap Inc. is a global retailer of clothing and accessories.
More than 60 per cent of Gap Inc.’s supplier factories already provide digital payments methods, such as online transfers to bank accounts or mobile wallets. The new goal will help scale this progress across the company’s global supply chain and positively impact the lives of more than one million garment workers.
David Hayer, senior vice president of global sustainability at Gap Inc. and president of Gap Foundation said, “At Gap Inc., we believe that good business practices can help change the world and fuel growth. By having our suppliers pay garment workers digitally, we aim to accelerate the transition towards a more transparent workplace for the women and men who make our clothes. It’s a win-win for garment workers and factories alike.”
Women make up about 80 per cent of the world’s garment industry workforce but often live in a cash-only environment and lack access to formal financial services. Electronic wage payment methods have the benefit of drawing previously unbanked workers into the formal financial system, allowing women greater control over their finances and a safer way to save, send money, and invest. At the factory level, suppliers benefit from increased efficiency and speed. All parties also benefit from increased accountability, transparency, and security.
To help achieve the bold new commitment, Gap Inc. also announced that it has joined the United Nations-based Better Than Cash Alliance, a partnership of governments, companies, and international organisations that accelerates the transition from cash to digital payments in order to reduce poverty and drive inclusive growth.
Dr. Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance said, “Gap Inc. is one of the global brands leading the way when it comes to digitising workers’ payments in the garment sector. Its commitment today will continue the movement across the retail sector to improve lives, increase transparency and drive business benefits through digital payments, and contributing to the sustainable development goals.”
The company’s focus on promoting an inclusive digital payment ecosystem is the latest move by Gap Inc. to partner with suppliers to improve the livelihoods of the garment workers who make its clothing. The company’s supplier sustainability team continues to move beyond an “assess and remediate” model to a more innovative approach – with more cooperative, productive, and positive working environments as the end goal.