Boohoo mulls linking bonuses to ESG improvements
Boohoo is considering linking top bosses’ bonuses to improvements in the fast fashion firm’s environmental, social and governance (ESG) issues, following a scandal surrounding factories used by the retailer’s suppliers.
The Environmental Audit Committee (EAC) said that Boohoo had agreed to look into the idea of linking senior executive remuneration incentives to ESG improvements.
In December, the committee recommended that Boohoo link its bonus scheme to ESG improvements after the ecommerce giant was accused of facilitating poor workers’ rights.
Environmental Audit Committee chairman Philip Dunne MP, said:
“Boohoo’s response to our Committee’s letter sends promising signals that we are reaching a turning point in fast fashion’s awareness of its environmental and social responsibilities. It is welcome news that the board is considering aligning senior executive bonuses with making ESG improvements, and I look forward to hearing whether this is being taken forward.
“Bonuses shouldn’t just be linked to breakneck growth. Boohoo needs to demonstrate that it is delivering verifiable improvements in workers’ rights and the climate impact of its products.
“News last summer emanating from Leicester’s garment industry appalled us all, with allegations of modern slavery in supply chains and a lack of covid secure measures in factories.
“This spotlight on Leicester may have encouraged Boohoo to take steps to clean up its supply chain. Once the publicity dies down, I hope these changes remain in place for years to come with a renewed pride in ‘Made in Britain’ items and certainty on improved workers’ rights.”