Interview with ASN Bank and Fair Wear: A partnership for living wages

It’s been a year since the Living Wage Financials Platform was launched. This seemed like a good time for Arie Koornneef (director of ASN Bank) and Alexander Kohnstamm (director of Fair Wear Foundation) to reflect on the theme of living wages.

To read the original interview on the ASN Bank website, in Dutch, click here.

Photo: Jurgen Huiskes

Fair Wear Foundation, which was founded in 1999, and the Living Wage Platform, which was partly founded by ASN Bank, are working to improve working conditions in the clothing industry. This includes working together with European clothing brands. Living wage is one of the most important themes within this. Over the past 20 years, the Fair Wear has gathered a great deal of knowledge about how to close the gap between current wages and a living wage and the role that clothing brands can play within this.

A living wage in the clothing industry must become the new normal.

Alexander Kohnstamm, Fair Wear Executive Director

Why does a bank care about living wages?

Arie: ‘ASN Bank was founded by the trade union movement in 1960 and has traditionally had a strong social history. Almost 60 years later, human rights are anchored in our sustainability policy and it is one of our three pillars, in addition to climate and biodiversity. A living wage for workers is a human right, as written in the Universal Declaration of Human Rights, and is therefore of great importance.’

ASN Bank and Fair Wear Foundation are partners. What do you share with each other?

Alexander: ‘Just like ASN Bank, we share the realisation that things have to change in the modern economy. The way things are now cannot continue. What we as society now consider to be normal in the clothing industry should no longer be normal. A living wage in the clothing industry must be the new normal.’

And how do you complement each other?

Alexander: ‘Fair Wear has specific knowledge about the clothing industry, living wages and a network of businesses. ASN Bank can exert influence on listed companies through its investments.’

To what extent can you expect low-income Dutch people to purchase sustainably-produced clothes if they have a higher price tag?

Arie: ‘I think that is quite a dilemma. I understand very well that sustainable choices are not always easy on the wallet. As ASN Bank, we strive to make a just, sustainable society accessible to everyone. We strive to make sustainable clothing companies bigger and the larger clothing companies more sustainable. We do this through our entrepreneurial community for the World of Tomorrow and through our investments.’

Alexander: ‘You cannot make consumers responsible for the turnaround in the industry. They did not ask for fast fashion. What consumers can do is keep asking questions about where their clothing comes from. Cheap is not always bad and expensive is not always good. A product from a discount store and a luxury brand can be made in the same factory.’

The consumer did not ask for fast fashion.

Alexander Kohnstamm, Fair Wear Executive Director

Fair Wear Foundation has been around for 20 years. What has changed in that period?

Alexander: ‘A lot has improved, but not nearly enough. There are many steps between the cotton field and your wardrobe. A large part of the work in the clothing industry is low-skilled and easily interchangeable. This means that factories – and even countries – can be pitted against each other. Factories, in turn, cover themselves by producing for several clothing brands. It is therefore one large matrix of stakeholders. Together with the front runners, we are now showing that clothing production can indeed be fair, but the major clothing brands are needed to make the new normal mainstream. ‘

ASN Bank, Triodos and MN took the initiative in 2018 to set up the Living Wage Financials Platform. The platform now has 12 participants. Why is this growth significant?

Arie: ‘If you add up all the investment portfolios of the platform members, you have a total invested capital of more than 2.5 trillion euros. That is a 2.5 with 12 zeros. The greater the assets under management, the more influence the platform has. It makes a big difference whether you only address a clothing brand on behalf of ASN Bank or whether you do so on behalf of an entire platform. ‘

With wages improving in Asia, production seems to be shifting in part to Ethiopia. How do you view this shift?

Alexander: ‘Purchasing practices of Western brands have a huge impact on working conditions in clothing factories. In addition, before choosing a country where human rights are not adequately protected, brands must carefully consider whether they can be sure that they can contribute to better working conditions there. In short: even if they decide to go to Ethiopia, they have to consider whether they will become part of the problem or the solution.’

How does ASN Bank determine which listed clothing companies are eligible for its investment funds?

Arie: ‘We use our sustainability criteria to determine whether we allow or exclude a company.  A minimum of every four years we evaluate an approved company and determine whether we will stop, continue or hold discussions to improve the policy. That is what we call engagement. We also monitor whether a company is involved in controversies. There’s a fine line between moving forward together in good faith and the risk of coming across as being preachy.’

There’s a fine line between moving forward together in good faith and the risk of coming across as being preachy.

Arie Koornneef, ASN Bank Director

Finally, a dilemma: Your son or daughter comes home with a Primark bag. The latest purchase is proudly displayed. How do you react?

Alexander: ‘Mmmm. Hard to imagine. If he has bought a T-shirt there, I hope that he has at least asked the seller where and under what circumstances the T-shirt was made. Although I suspect he won’t get an answer to that question. “

Arie: ‘She has to make her own choices as a young adult. And you hope that you have taught them how to make the right decision. I have three daughters. They all look at clothing in their own way: the youngest follows fashion and buys specific designer clothes, the middle one looks wider and regularly buys sustainably and the eldest regularly gets hand-me-downs from her sisters. ‘

More info about the Living Wage Financials Platform

The Living Wage Financials (PLWF) Platform has grown considerably in its first year: 4 companies have now joined the 8 original founders, meaning that jointly managed assets have more than tripled to 2.5 trillion euros.

More info about Fair Wear’s work on living wages

For more information about the work Fair Wear does on living wages, read through our living wage programme page.