Parliament isn’t finished with Boohoo just yet.
In a letter dated March 4 and addressed to Boohoo chairman Mahmud Kamani, Members of Parliament urged the company to reframe its growth, clean up its act and go so far as to link executive bonus pay to environmental, social and corporate governance initiatives.
“We have written to Mr. Kamani to seek updates on a range of issues, including on supply chain transparency. We are asking Boohoo to put its money where its mouth is and link the multimillion-pound bonuses it has lined up for its bosses to the achievement of its ethical and environmental pledges,” commented EAC Chairman, the Rt. Hon. Philip Dunne MP.
The MPs belong to Parliament’s Environmental Audit Committee. Since the committee’s “Fixing Fashion” initiative, it has zeroed in on reforming the U.K. apparel industry, at a time when more and more nations and industries are focusing on sustainability.
Earlier this week, Boohoo again made headlines as an investigation by U.S. Customs and Border Protection kicked off, regarding claims of forced labor — perhaps nudging the letter to be drafted.
“The fashion industry’s impact on the climate and biodiversity is considerable, not least through its encouragement of a throwaway culture for cheap garments. This is unsustainable if the world is meet the goals of the Paris Agreement to limit global temperature rises to well below 2 degrees Celsius,” read a portion of the MPs’ letter.
In December, the committee held a hearing for Boohoo, also hearing from the firm’s new responsible sourcing executive Andrew Reaney (formerly of Primark) and Nasty Gal’s commercial director Kelly Byrne.
In the hearing, Kamani acknowledged how “things have gone wrong because of the fast-growing nature of this business,” saying how “our business has been growing between 50 percent and 100 percent year-on-year and we have been growing the top line and processes do fall away.”
The letter referenced the disconnect with the business’ “very generous” bonus scheme revealed last June that would pay out between 50 million and 150 million pounds to its founders and top executives if its share price rises 66 percent over three years, meant to encourage “continued breakneck growth.”
“We believe that such a move to link growth incentives to measurable ESG criteria — such as the environmental sustainability of your products and the welfare of workers — would demonstrate genuine commitment to environmental and social responsibility. You pledged to discuss this at the next board meeting. We would welcome an update when the board has considered this matter; its decision, and the rationale behind the decision made,” the letter stated.
The committee desires concrete updates of other promises made at the December hearing, including a list of updates on measures to ensure minimum wage compliance within its supply chain, the names of the 64 businesses Boohoo said it had severed ties with, as well as the follow-through on the published details of its tier one and tier two supply chain in March 2021.
Taking note of some positive efforts thus far, the committee commended Boohoo’s revised payment terms (now in 14 days), its joining three sustainability initiatives (including the Sustainable Apparel Coalition), as well as its continued commitment to the local industry with construction under way of a factory in Thurmaston Lane in Leicester, England.
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