Investors Push LVMH for More Transparency on Supplier Treatment
Amundi and Other Investors Push LVMH for More Transparency on Supplier Treatment
Europe’s top asset manager Amundi and other investors are urging luxury giant LVMH to take more aggressive steps in monitoring its suppliers’ treatment of workers following allegations of sweatshop-like conditions at subcontractors for high-end brand Dior.
The investigation into suppliers for LVMH’s second-largest fashion label has raised concerns about potential worker exploitation in the global luxury goods industry, valued at $1.6 trillion.
Amundi, holding a 0.6% stake in LVMH, worth $2.2 billion, has reached out to the French conglomerate for more transparency on supplier audits and internal purchasing practices. Other investors, including CCLA Investment Management and Robeco, are also calling for public evidence of efforts to ensure fair pay for workers in the supply chain.
The recent allegations have prompted a closer look at policies and practices within the luxury sector to proactively manage supply chain risks, particularly around working conditions.
Italian prosecutors revealed that Dior’s subcontractors were paying workers as little as 53 euros per bag assembled, while selling the same bags in stores for 2,600 euros. Dior has since cut ties with the suppliers in question and denied reports of bags being produced at significantly low costs.
LVMH has updated its supplier code of conduct and is working towards a more uniform approach across all its brands. The conglomerate acknowledges the need for continuous improvement in ensuring fair wages and safe working conditions for all workers in its supply chain.
Investors are pushing for greater transparency and accountability from luxury brands like LVMH, emphasizing the importance of thorough due diligence efforts to promote living wages and address human rights risks.
As the industry faces scrutiny over supplier practices, stakeholders are calling for increased disclosure and oversight to ensure ethical standards are upheld throughout the luxury goods supply chain.