Human Rights in our Value Chain
Luhta Sportswear Company is committed to respecting all internationally recognised human rights and ensuring that these principles are upheld both in our own operations and throughout our entire value chain. This commitment applies to our own employees, workers across our value chain, local communities, as well as our customers and consumers.
Our operations extend across multiple countries and partner networks, which makes the consideration of human rights an essential part of our business operations, risk management and long-term sustainability development. Our approach is based on internationally recognised human rights and labour standards, as well as a risk-based due diligence process through which we identify, prevent, mitigate and address actual and potential adverse human rights impacts related to our operations.
Principles and Commitments Guiding our Operations
Our human rights work is guided, among other frameworks, by the UN Guiding Principles on Business and Human Rights (UNGPs), the ILO Core Conventions, and the OECD Guidelines for Responsible Business Conduct. These principles also form the basis for our company’s Codes of Conduct and sustainability policies.
The above-mentioned principles are reflected in our practical operations through requirements such as non-discrimination, the prohibition of child labour and forced labour, safe working conditions, and fair and equitable treatment throughout the entire value chain.
Due Diligence and Human Rights Risk Assessment
Our human rights work is based on a due diligence process in line with UN and OECD principles, through which we identify, assess and manage human rights risks related to our operations across the value chain. We have conducted a human rights risk assessment, which particularly guides the prioritisation of risks related to the supply chain and the development measures addressing them.
Our due diligence process covers the identification, monitoring and mitigation of risks, as well as corrective actions where necessary, in cooperation with suppliers and other partners. This work is continuously developed as part of our sustainability governance.
Sustainability in the Supply Chain
Human rights and working conditions are at the core of responsible supply chain management. We operate in a global value chain where human rights and labour risks vary by region. We require our suppliers to respect human rights and monitor implementation on a risk-based approach, through close cooperation, audits and development activities. Read more about supply chain management here.
Living Wages in our Value Chain
We have assessed the human rights impacts and risks of our business across our entire value chain. Based on a human rights-based risk assessment conducted in 2024, living wages are one of the key human rights issues in our supply chain.
In global and long value chains, low wage levels and wages that are insufficient to live on are a major recognized problem. Poverty is recognized as the root cause of many global social challenges and environmental problems. Paying workers a living wage is a key measure of reducing poverty. At the same time, it strengthens the sustainability and productivity of supply chains and the workforce.
Commitment to Promoting a Living Wage
We are committed to ensuring gender pay equality and a living wage for all our employees. We assess the situation annually and make any necessary adjustments. At our subsidiary in Suzhou, we have been conducting a salary monitoring process since 2021 to ensure that the salaries we pay exceed the local living wage level defined by the Global Living Wage Coalition. If the annual review shows that the salary level falls below the defined level, we will take corrective measures in cooperation with local management.
We are committed to fair remuneration and living wages. We are committed to working to ensure that all employees throughout our supply and production chain are paid at least a living wage. This commitment covers both our own operations and our supplier network.
We are currently working to ensure that our supplier network pays at least the legal minimum wage through our policies and audit practices. However, we are aware that the legal minimum wage often does not correspond to a living wage. We are actively exploring solutions to achieve this goal in collaboration with other industry players and stakeholders.
What Does a Living Wage Mean?
A living wage is a different concept from the minimum wage defined by law. In its human rights work, Luhta Sportswear Company defines a living wage in accordance with the Anker methodology recognized by the international Global Living Wage Coalition. A living wage is defined as the minimum wage that an employee needs to cover their family's reasonable standard of living and basic needs, including food, water, housing, education, healthcare, transportation, energy, clothing, and other essential needs, as well as provisions for unexpected expenses. A living wage does not include compensation for overtime and must be earned from normal working hours (the ILO Working Time Convention sets the maximum normal working hours at 48 hours per week).
How Do we Promote Living Wages in our Value Chain?
We want to promote living wages throughout our value chain, and in 2024 we began working on a roadmap to ensure that all employees in our supply chain receive a living wage. We are promoting this work in a systematic manner in cooperation with various stakeholders and our suppliers.
We have defined the following key measures as part of our development work:
2021–present:
Annual wage-level surveys at Suzhou subsidiary using the GLWC methodology. Remedial measures as necessary.
2023:
Updating human rights policies and adoption of the Board-approved human rights commitment.
2024:
Implementing human rights risk assessments and identifying living wages as a prioritized human rights issue.
Mapping of living wage levels and current wage levels in the supply chain.
2024–2025:
Training procurement and production organizations on human rights and living wages; strengthening internal competence.
2025–2026:
Implementation of a development plan to promote living wages in the value chain.
Identification of living wage levels in all key production countries and systematic collection of wage data from suppliers.
Development of responsible procurement practices to support suppliers (pricing, delivery times, capacity needs).
Including living wages in the North Star process and supplier assessment.
Strengthening multistakeholder collaboration (e.g. organizations, labor market actors, business networks) to promote structural changes.