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Boohoo considering EAC recommendation to align bonuses with ESG improvements

24 April 2021

In response to a letter by the Environmental Audit Committee (EAC), Boohoo Chairman Mahmud Kamani has said that the company's board is looking into whether it can link senior executive remuneration incentives to Environmental Social and Governance (ESG) improvements.

Background

The EAC recommended the move following an evidence session in December, attended virtually by Mahmud Kamani and executives.

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

In response to concerns around Boohoo's awareness of VAT fraud, Mr Kamani has advised that any concerns relating to financial reporting are being referred to the Gangmasters and Labour Abuse Authority (GLAA).

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.

Chair's comments

Environmental Audit Committee Chairman, Rt Hon 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."

Further information

Image: Creative Commons