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A renowned columnist, speaker and the author of a bestselling book on CSR, Per Grankvist is a thought leader on how the new rise of civic engagement as well as sustainability is changing the way business, government and NGOs operate and collaborate. Read more.

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Saturday
Sep152012

The CEO turned activist

Although it is not usual for Prime Ministers to make time in their busy schedules to meet activists, Mrs. Sheik Hasina of Bangladesh made an exception to the rule and met a human rights activist from Sweden last Monday evening. And that is not the only thing that makes this story extraordinary.

Not only had the activist, still in his 30s and smartly dressed in suit and blue tie, travelled all the way to Dhaka from his hometown Stockholm to make his case on the benefits of an increased wage for workers in the Bangladeshi textile industry. His arguments for doing so primarily focused on the benefits this would give the country of Bangladesh rather than the single Bangladeshi worker.

Since foreign trade plays a major role in the development of countries as a source of economic growth, the activist argued that it is in the interest of the Bangladeshi textile industry, as well of fashion behemoths with extensive production in the country like H&M, that the local industry continues to mature. In order to achieve this goal, it is of utmost importance that people are treated with respect and that employers properly compensate their workers, the activist told Mrs. Hasina.

Another detail that makes this story unusual is that the said activist, Mr. Karl-Johan Persson, is also the CEO of H&M as well as one of their biggest shareholders. 

As unions struggled to improve workers conditions in many countries in Europe in the late 1920s and early 1930s, the interest for becoming a member gradually decreased among workers as a result. In Sweden and the US however, well-organized unions managed to obstruct production lines and issue industry wide strikes to an extent that resulted in a lot of their requirements for higher wages and better work environments were being met. However, as a result of these achievements, Swedish and US companies started looking at how production could be moved abroad as a way of counter balance the increased salary costs and remain as profitable as before.

The trend these companies started has since then become the rule. Workers across the world now face an ongoing threat of losing their jobs abroad if companies find a new place where people are willing to work as hard for even less pay. Rarely in the history of business has a billionaire capitalist asked the union or figures in the public sector to raise the wages of his workers. And certainly not for the sake of a country’s future!

But then again, Mr. Persson is not your ordinary CEO. Being the head of a company that thrives on our appetite for fast fashion, you might think that he’s unconcerned with the fact that we tend to regard cheap items of closing as more disposable than expensive pieces thus triggering unnecessary consumption. Even though more and more of those items are being produced in a conscious way, it still has a huge environmental impact. But he’s not.

On a number of occasions both Mr. Persson and his right hand woman and head of sustainability at H&M, Mrs. Helena Helmersson, have pointed to the fact that H&Ms mission “fashion and quality to the best price” but says nothing of them actually selling items or that those items should be made available at the cheapest price possible. This has been interpreted as a hint that H&M is actively looking into new business models that might include taking back garments after you grown tired of them (H&M have tried in Switzerland), or renting your Friday party top and then returning it by mail for cleaning.

H&M started buying from Bangladeshi suppliers some 30 years ago and it has become one of their most important buying markets. As they don’t own any factories, they can’t make any decision on wages. In addition to working with suppliers to increase wages H&M now hope that the meeting with the Prime Minister will influence the government of Bangladesh to increase the minimum wage, thus leveling the playing field for all companies purchasing from the country, including their competitors GAP, Zara and Uniqlo.

Coming from an activist heading a company H&Ms size, Mrs. Hasina has all the reason to pay attention to Mr. Persson’s arguments as the result is likely to be a situation with many beneficiaries. Not only will the increase of workers add to the perception of Mrs. Hasina being someone who acts in what is the best interest of the people, a wage revision can help address basic needs of the workers and this bring greater stability to the nation of Bangladesh. All this while Mr. Persson hopes that it will in turn help employees and buyers work together on improving productivity as well as resource efficiency in the country’s textile sector. 

In a country where politicians historically have refrained from taking action in improving basic workers rights, this CEO-turned-activist will not only undermine any argument that insist that foreign companies threat to move production abroad if salaries are not at a minimum, he might even make a Prime Minister act.

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