Understanding what companies say

The profiles are based on information supplied by the companies themselves. Companies were given the option of submitting before the deadline to give us time to ask clarification questions, and a few did this.

As in previous years, we have given companies a grade to help you follow how far along the route towards implementing a living wage they are. These grades are intended to make it easier to compare responses and see how responses they match up to our criteria. They are not intended as a ranking.

Because so many companies have begun pilot projects on wages this year, and because all pilot projects are not as good as each other, we have split the old Grade 3 into three separate grades, to help distinguish between them.

Grade 0: Does not accept the principle of a living wage
Companies whose codes of conduct and/or submissions do not refer to living wages, or which explicitly do not accept that they are responsible for ensuring that living wages are paid.

Grade 1: Accepts the principle of a living wage, but applies legal minimum/industry benchmark.
Companies that refer to the living wage, but which use this interchangeably with legal minimum/industry benchmark wages, or which argue that minimum and/or prevailing wages constitute a living wage.

Grade 2: Acknowledges that minimum and industry benchmark wages are not sufficient standards, but no real efforts to apply living wage.
Companies that accept that progress is needed on wages, but are unable to offer any concrete examples of steps they have taken on this matter.

Grade 2.5: Can offer concrete examples of steps to increase wages in the supplier base, but pilot projects are limited in scope and have significant omissions.
Grade 3.0: Can offer concrete examples of steps to increase wages in the supplier base, but there are either significant omissions or there is no clear plan to move beyond pilot projects.
Grade 3.5: Can offer concrete examples of steps to develop and implement a living wage methodology in the supplier base, with clear plans to move beyond pilot projects.
These three grades refer to companies citing pilot projects that are designed specifically to address wages (wages need not be the only issue addressed by the pilot project, but must be a concrete, demonstrable focus). We didn't consider pilot projects mentioned in any previous submissions unless there was clear evidence of progress made on wages in that project over the past year, or steps to implement the learning on wages from that project elsewhere.
We have split grade three in this way to distinguish between the large number of retailers that have or are planning pilot projects: we have some outstanding concerns with some – frequently because they commit only to raising wages, not to implementing living wages – and others are interesting projects but the retailer does not appear committed to rolling the learning out across its supply base.

Grade 4: Sophisticated and serious engagement with a living wage, beginning to move beyond pilot programmes, but still not systematic across supplier base.
Companies that have made efforts to implement living wages beyond pilot projects, with a clear plan for how this will be accomplished for all workers and demonstrable progress towards that end.

Grade 5: Sustained implementation of an effective living wage policy across entire supply base.
Companies that have a clear rationale and evidence that all workers in their supply chain earn a living wage.

Health warning!

We believe that how a company performs on living wages is a good indicator of its current commitment to workers' rights more generally. That's why we've homed in just this one issue. But it does mean you should bear in mind several things when reading the profiles.

Things change

These profiles are accurate as of September 2008. This presents one particular problem regarding companies that are taking part in the ETI living wages project. This project is likely to include all of the elements of our definition of a satisfactory project, but has yet to get the go-ahead from all its members to begin work on the ground. This means that companies that are putting all their eggs in the ETI basket are likely to score worse than those that have decided to go it alone, despite the fact that these latter companies' projects do not meet all our criteria. This is perhaps unfortunate, but at the same time it is important that companies do not settle for burying complicated issues like living wages in ETI pilot projects: project members must be held collectively responsible for the project's slow progress, and individually responsible for being transparent about their activities.

There are other issues to consider

In previous years, this report concentrated not just on living wages, but also on two other thorny issues:

1. What companies were doing to ensure workers really did have the right to defend themselves by forming and joining trade unions (referred to as freedom of association and collective bargaining)

2. How companies internally monitored and independently verified the claims they made about working conditions at their suppliers.

To be fair to companies that made significant progress in response to our criticisms in previous years, we have given a space in the profiles to “other significant information” to include any updates on these areas. But you will find much more information by looking at companies' submissions, their profiles in previous years, and their own websites.

And in addition to this, there are other things that make up the picture of how 'ethical' a company is, such as Fairtrade cotton, environmental sustainability, and animal rights.

Our methodology is not perfect

Our profiles are as much a measure of how much effort individuals within the companies put into their responses to us as they are of company policy and practice. This is not a bad thing: transparency and engagement with stakeholders are important aspects of the steps companies should be taking.

Each profile is based on a limited (but, we think, sufficient) amount of opportunities for dialogue with the company over the last three years, rather than an exhaustive discussion. Further correspondence might have opened up new issues and answered some questions, but a cut-off point had to be drawn somewhere.