Ensuring Living Wages Across Suppliers: Royal LC Packaging’s Commitment
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1. Company at a Glance
In this case study, we will explore how Royal LC Packaging International BV (LC Packaging) worked towards their key production partners' employees receiving a living wage through a combination of assessment, stakeholder collaboration, and long-term monitoring and evaluation.
Packaging products and services
Industry
1923
Founded
+1,500
Number of Employees
The Netherlands, with affiliates in Europe, Africa, Asia, and North America
Headquarters
2. The Challenge
Addressing Wage Inequality in the Supply Chain
LC Packaging, a producer and distributor of flexible transport packaging, faced the challenge of addressing wage inequality within its supply chain. Recognizing the risk of wages falling below a living wage standard, the company identified an opportunity to align its business strategy with ethical labour practices. By committing to paying a living wage, LC Packaging aimed to enhance financial stability for workers and set an example of ethical leadership within the packaging sector.
In 2021, the company participated in the SDG Ambition Accelerator by the United Nations Global Compact and set a goal of having 100% of their key production partners' employees paid at least a living wage by 2030. These production partners together represented 81% of LC Packaging’s total procurement spend and employed 20,309 employees and contractors.
3. The Action
Actions Taken to Achieve Living Wages
Once the company ensured that they met living wage standards in their own operations, LC Packaging focused on their living wage ambition with key production partners through structured steps.
Assessment and Benchmarking
The company used the Global Labour Index by the WageIndicator Foundation to identify countries where minimum wages fall below living wage levels. Then, the company applied the IDH Salary Matrix to calculate and address wage gaps.
Development of a Living Wage Strategy
Inspired by the IDH roadmap on living wages and the UN Global Compact Living Wage Analysis Tool, the company designed a five-step strategy: measure, define the strategy, report, verify, and share best practices on living wages.
Policy Development
The Human Rights Policy andSustainable Supply Chain Policywere communicated and implemented. Moreover, all key production partners signed the dedicated Code of Conduct for Key Production Partners, which includes a binding commitment to pay at least a living wage by 2030. To support this, the company built a strong business case emphasizing both regulatory relevance (e.g., CSDDD) and the company's own positive experience—such as increased employee loyalty and productivity—while reinforcing their long-term commitment to suppliers, including financial investments and readiness to cover surcharges when needed.
Communication and Transparency
The company educated stakeholders, including customers, on the importance of living wages and integrated its ambition into its core sustainability strategy through communication, workshops, and training. Moreover, on a regular basis, LC Packaging discusses the importance of the topic during sustainability events, such as the Living Wage and Living Income Summit and the UN Global Compact Leaders Summit (2024).
Ongoing Monitoring and Evaluation
Regular assessments and supplier engagement ensure that wages remain aligned with cost-of-living adjustments. The company has appointed and trained an in-house IDH Salary Matrix expert from the sustainability department to support and advise production partners with filling out the tool and checking the results.
4. Overcoming Barriers
Supplier collaboration
Encouraging suppliers to implement living wages required trust, education, and long-term partnerships.
Wage adjustments amid inflation
The company consistently supports its key suppliers in annually calculating the living wage gap and working towards customized solutions to close the gap and maintain living wages for the years to come.
5. Impacts & Results
100 percent of key production partners (20,000+ employees) committed to paying a living wage by 2030. This represents 81 percent of the company's annual procurement spend.
Strengthened supplier relationships and improved employee satisfaction. Through their Living Wage Programme, the company has been able to connect with its suppliers and has deepened its relationships. That has helped both the company and its partners boost their resilience.
53 percent of key production partners pay their employees at least a living wage. This means that 57.2 percent of key production partners’ employees currently earn at least a living wage.
Within the market, the company is known for their living wage initiatives, which is attracting socially- minded customers.
6. Key Lessons Learned
Meaningful change takes time
Achieving a living wage requires long-term commitment and supplier support.
Stakeholder education is key
Raising awareness among clients and suppliers ensures better collaboration.
Advocate for industry change
Long-term success depends on customers' willingness to support ethical wage practices.
Engage with initiatives
Sharing best practices can encourage similar initiatives across the sector.
"A living wage supply chain can be achieved if all actors understand the value and take their responsibility. This means initial price increases, but in the long-term we feel that implementing living wages in the value chain is actually the lowest cost solution: good wages means happy, healthy and loyal employees. This translates into high productivity, high quality products and a low risk of operational disruptions.”
Lotte Mastwijk, Head of Sustainability
7. Resources
LC Packaging's commitment to UN Global Compact business:
Forward Faster signatories in Living Wage and Climate Targets
SDG Ambition Accelerator participants in 2021
Women’s Empowerment Principles signatories since 2021
Recommended UN Global Compact resources
Course: How to Ensure a Living Wage for All Employees
Living Wage Analysis Tool
Moving Living Wage Forward Faster Action Guide
You can learn to know more about Royal LC Packaging International BV's Commitment to Living Wages on their website.
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Ensuring Living Wages Across Suppliers: Royal LC Packaging’s Commitment