The Sustainable Procurement Kit allows you to calculate the degree to which the price paid for a particular product enables the payment of a living wage or income at supplier level. This enables users to set commitments towards closing the living wage gap and supports dialogue within supply chain actors.
The kit has been inspired by the Malawi sustainable procurement model, which was developed in collaboration with Oxfam GB and with support from Accenture Development Partnerships. After being tested by leading tea companies, IDH revised the model to facilitate it’s use in other countries and other sectors.
How does it work?
Individual buyers and suppliers can complete the Kit to understand the relation between their product pricing and the living wage on farm and supplier levels. The Kit enables you to compare current commodity prices with several sector-, country-, and region-specific information covering productivity and purchase data, labour data and living wage benchmarks.
Earlier this year, IDH launched the Salary Matrix, together with Rainforest Alliance, as part of our broader living wage strategy. This Matrix allows suppliers to assess how the salaries (plus the in-kind benefits) they provide to their workers compare to the living wage benchmark. Together with the Sustainable Procurement Kit, we now have a set of tools to offer to companies to work on living wage.
Only by understanding the impact of purchasing decisions on suppliers’ ability to pay a living wage, can we hope to create more sustainable procurement practices. The IDH Sustainable Procurement Kit aims to support buyers in this understanding. For example on the economic consequences for producers' sourcing strategies. This will also help to better enable realistic and sustainable living wage targets to be set and met.