Boohoo chairman Mahmud Kamani has said that the company’s board is exploring whether it can link senior executive bonuses to Environmental Social and Governance (ESG) improvements.

The Environmental Audit Committee (EAC) recommended the move following an evidence session, attended by Kamani and executives, which took place last December.

The Committee said that the linking senior executive incentives to ESG improvements would demonstrate a genuine commitment to environmental and social responsibility.

In March, the online fashion retailer cut the number of its suppliers down from 200 to 78, following a review into its supply chain. Last year an assessment found “unacceptable” working conditions in the company’s warehouses, including cramped factories that sometimes had no open fire escapes, and payment of workers below the minimum wage.

The publication of Boohoo's response comes ahead of the EAC's further evidence session on Fixing Fashion on Wednesday 28th April, where it will be considering the new Textiles 2030 initiative.

"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,” said EAC chairman, Philip Dunne MP. "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.”

Dunne added that bonuses shouldn’t only 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,” he said. "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.”

The chairman suggested that the spotlight on Leicester might have encouraged the fashion retailer to take steps to clean up its supply chain. But Dunne said that he hoped that these changes remain in place once the publicity dies down.

Share Story: