Carlo Capasa

MILAN — Camera Nazionale della Moda Italiana — or CNMI — is expanding its commitment toward sustainability.

On Wednesday, the country’s fashion chamber released the “Social Sustainability Report” survey investigating wage practices and working conditions among luxury fashion suppliers in Italy. Simultaneously, it issued the “Social Sustainability Road Map” document listing 10 guidelines to help companies improve their practices.

The president of the organization Carlo Capasa explained that the goal of the project is “to better understand the Italian supply chain context and support the industry in adopting and implementing some basic principles into the company culture. The initiative is a first step and it is aimed at making wage practices progressively improve in supply chains, and at ensuring the coherence needed when it comes to wages.”

The executive underscored this topic is central to the organization’s agenda because the fashion industry is not only an important engine of economic growth and recovery post-pandemic, but also an important source of social well-being as it employs more than 500,000 workers across large factories as well as smaller, family-run businesses.

For the project, CNMI partnered with Fair Wage Network, which carried out the large-scale survey from June 2019 to February 2020 — before the global pandemic — and interviewed nearly 1,100 employees working at 45 suppliers of major luxury brands, ranging from textile manufacturers to tanneries.

The surveys were compiled according to the Fair Wage Network’s comprehensive approach that defines a fair wage by taking into consideration 12 criteria. In addition to wage levels, adjustments and pay systems, these include other working conditions such as the number of working hours, intensity at work, opportunities for career progression, eventual wage discrimination and social dialogue mechanisms.

The survey offered a positive overview and revealed good working conditions in Italy. In terms of legal compliance, nearly all workers reported to be paid on time, without delays. The gross average wage among interviewed suppliers was 2,062 euros at the moment of the survey, almost 50 percent higher than the living wage for Italy, which was 1,387 euros, according to Fair Wage Network.

Despite the absence of a legal minimum wage at the national level, the good standard revealed by the survey is mainly due to the existence in Italy of collective agreements signed in individual sectors that help wages to be adjusted on a regular basis, through a consultative process with representative trade unions. To wit, all suppliers interviewed reported to be covered by a national collective labor agreement, which defines mandatory contractual minimum wages and set wage adjustments.

Overall, 81 percent of workers were either fully or partially satisfied by their working conditions, and 82 percent were satisfied about their wages either fully (16 percent) or partially (66 percent). During the survey, 25 percent of suppliers were also found to have reached the necessary threshold to obtain the Fair Wage certification, while many others were said to be able to reach such a level soon through some improvements in their wage practices.

Areas of improvement identified in the report included the need to ensure full overtime payments; to further link wages to performance, skills and professional experience, and to enhance pay systems so that workers could feel a long-term commitment to their jobs.

For instance, complementing collective agreements with monitoring and wage bargaining at enterprise level are necessary to check workers’ diversified conditions in terms of personal and family situations and ensure them the minimum wage, enhance their professional experience and individual performance.

In addition, considering the high proportion of women employed in the luxury sector — they represented 58 percent of the survey’s sample — individual companies should focus not only on paying them as much as men for the same qualifications and jobs, but also grant them access to the same opportunities for career progression. Other wage gaps between locals and foreign employees as well as between workers on a temporary or permanent contract should be progressively reduced.

“This is a starting point. Now we have a picture of the situation and this is very helpful not only for Italian brands but for others that want to produce in Italy. Plus it can encourage companies to be more transparent,” Capasa said.

The roadmap to help companies improve included basic principles like ensuring “a fair wage that will enable workers and their families to live a free and dignified life and allow them to participate in society,” as well as securing regular, timely payments even in a context of sudden economic changes, as seen with the pandemic.

The roadmap also invites companies to embrace diversity and inclusion and avoid any source of wage discrimination and pay gap for gender, national origins, sexual orientation or types of work contract “in order to create multicultural teams but also a more dynamic work environment and improved performance.”

Companies are additionally called on to monitor wage levels over time to ensure these are still fair and “progress at least in proportion to increases in inflation and costs of living.”

“In this approach, wages must be seen not only as a cost but also as an investment in human capital, a sign of quality in human resources and in the production process,” reads the manifesto, highlighting the importance of effective wage practices in attracting and encouraging new talent that could contribute to the development of the sector.

“Communication with all collaborators is also key through detailed individual work contracts and pay slips, and also regular communication channels. These guidelines should motivate employees to work and to advance their career in the luxury sector,” reads the document.

“We will keep working on these themes. In the brands this culture is already very strong but in the supply chain we have to strengthen it,” Capasa said. “We want to reach a point where the Italian supply chain is the best one in the world, and I hope we will get there in the next three to five years.”

To reach this goal, CNMI will additionally implement workshops and meetings promoting this manifesto, in addition to encouraging and coordinating the conversation among fashion houses, suppliers, consumer associations and institutions in order to raise awareness of the topic.

CNMI began to focus on fair wages in 2018 by establishing the “Commission on Social Sustainability” made up of luxury companies Giorgio Armani, Gucci, Moncler, Prada, Salvatore Ferragamo and Valentino.