IDH perspective on the progress made and steps still to be taken related to the banana living wage commitments

IDH has been convening the Dutch, Belgian and UK retail living wage commitment since 2020. As pioneers to the banana commitments, the Dutch retailers (6) have set the common objective of reducing the living wage gap in their banana supply chain by 75% by the end of 2025. Building on the learnings and experience of the Dutch commitment, the Belgian and UK retailers (12) have set the ambitious goal to close the living wage gap completely at their banana producers by the end of 2027.  

Within the commitments, IDH has been taking up the role of neutral convener. We bring retailers together to align approaches to measuring, verifying and closing living wage gaps in their banana supply chains.  This work is supported through IDH’s Roadmap on Living Wages and the tools and guidance developed under it, including the Salary Matrix and Audit Guidelines. IDH monitors progress under the commitment and publishes annual reports tracking both living wage gap data and the actions retailers are taking to address those gaps.  

In Germany, the Working Group on Living Wage and Living Income is managed by GIZ. Since 2023, IDH and GIZ have collaborated through the Better Together initiative to improve alignment between national approaches. This alignment is critical for suppliers and producers serving multiple European markets and helps avoid fragmented or conflicting requirements.  

Step-by-step progress

Retailers are measuring the living wage gaps in their supply chains using the IDH Salary matrix on an annual basis. The Salary Matrix is a tool designed by IDH and the partners of the Roadmap on Living Wages to: 

-Provide a structured calculation of living wage gaps based on payroll and benefits data 

-Empower producers with management data about their wages, in-kind benefits, and gender pay gaps, how these compare with relevant living wage estimates 

-Support dialogue between buyers, suppliers and social partners. 

Since the start of the commitments (in 2020 for the Dutch and 2023 for the other commitments) retailers have taken considerable steps towards closing their living wage gaps. First, by mapping their entire supply chains and gaining insights on the prevailing living wage gaps. But also, by improving data quality through capacity building and joint verification exercises as well as exploring solutions to close the gap. Regarding the latter, all retailers agreed in 2024 to implement voluntary contributions in their supply chains as a short-term, practical solution that retailers can easily implement on their own to show shared responsibility with their counterparts. Since then, 13 retailers have started paying voluntary contributions to (part of) their suppliers either through the Fairtrade system or through their own initiative.  

A considerable road has already been travelled, and impact is starting to be seen on the ground. However, challenges remain, and alternative longer-term solutions that require involvement of other stakeholders, like social dialogue, responsible procurement practices and national wage setting mechanisms, need to be further explored to achieve structural and systemic change. 

Measuring the living wage gap and verification 

Because Salary Matrix data is self-reported, verification of the data is essential to instil credibility and trust with all parties. Several retailers have been participating in joint verification exercises in the past which have provided several learnings (see here. for a full overview) mostly related to the root causes related to poor data quality. One of the main findings of the verifications has shown that negative verifications are due to the lack of proper registration systems of working hours and salaries. Therefore, moving forward, promoting such systems at producers will be important, as well as discussing with standards how they can further play a role in embedding these systems at producers. 

Further, while these exercises have been very useful in the past to create efficiency and reduce audit burden by exploiting as much as possible supply chain overlap, these efficiencies have worn out after a couple of years. Producers are suffering from increased verification and data collection burden. To address this, IDH and GIZ are looking into further improving the risk-based approach that they started developing jointly in the past. This risk-based approach aims for more targeted data collection and verification based on high-risk profiles.  

Finally, IDH recognises the need for workers to be involved in the verification process to ensure that the data entered in the salary matrix reflects reality. This criterion is therefore included in the IDH Salary Matrix Audit Guidelines and captured in verification reports. 

 During 2025, as part of the IDH and GIZ-supported retailer commitments, 87 Salary Matrices were verified by FLOCERT across 10 countries over a total of 693 ones submitted to IDH.  Workers’ or trade union representatives were involved in 81% of the verification exercises. Next to this, further efforts will be made to explore how to include the worker voice in the data collection.  

IDH is currently piloting the use of the fair work monitoring tool, a worker-led data collection tool developed by CNV, in Colombia. This pilot will put the findings of the Salary Matrix and the Fair Work Monitor next to each other, with the aim of checking whether and where the Salary Matrix needs to be complemented with additional worker data.  

Voluntary Contributions as a transitional tool  

Voluntary contributions are additional payments made by retailers to help reduce living wage gaps. These payments can be made through existing mechanisms like Fairtrade premiums or can be implemented independently by retailers with the data collected through the Salary Matrix tool. 

As mentioned previously, all retailers agreed in 2024 to implement voluntary contributions in their supply chains as a short-term solution. Since then, 13 retailers have started paying voluntary contributions to (part of) their suppliers either through the Fairtrade system or through their own initiative.  

Supply chain partners are welcoming this initiative and change is starting to be seen; however, it should be noted as well that there are several challenges related to the implementation of voluntary contributions. First, their impact is proportional to participating retailers’ purchasing volumes. This can result in very small amounts at certain farms. Additional retail involvement, but also alignment on how to group retail contributions or use smaller amounts for general benefits, is therefore essential to increase workers’ impact. IDH is currently developing with GIZ a more detailed technical guidance specific to the banana sector related to the implementation of voluntary contributions. These guidelines are set to be published in autumn of 2026.  

Further, IDH advises that workers be consulted on the preferred type and distribution method of voluntary contributions. However, evidence of worker consultation is currently limited and often anecdotal. This is an area where stronger documentation and transparency will be needed. Currently, IDH has published a few case studies 1highlighting the first impact of voluntary contributions in the supply chains. IDH is planning a more extensive evaluation study to assess the impact of voluntary contributions on workers’ livelihoods and their effectiveness later this year.  

A case study of Uniban’s experience with voluntary contributions illustrates that workers may perceive them as one‑off bonuses rather than as measures intended to reduce living wage gaps. This reinforces the importance of clearer communication, stronger worker involvement, broader retailer participation to increase both scale and impact, but most of all the need to work on longer-term solutions.  

Voluntary contributions are linked to a commercial relationship. Once this relationship ends, the contribution ends as well. It is therefore not a structural solution for wage improvement, even though it has increased trust among the supply chain partners. All participating retailers acknowledge this and agree that, therefore, attention needs to be paid to embedding the concept of living wages in social dialogue, national wage setting mechanisms and responsible purchasing practices, next to the voluntary contributions. Both systems are considered to be complementary and implemented in parallel.  

Social dialogue and national wage-setting mechanisms

As mentioned above, social dialogue is one of the long-term solutions IDH has been advocating for to realise structural wage improvement. IDH has supported targeted projects to strengthen social dialogue in the banana sector up until now. Building on work in  Côte d’Ivoire that contributed to a framework agreement on living wage negotiations, similar initiatives were launched in Ghana and Cameroon in late 2025. These projects are implemented by BananaLink and funded by IDH together with retailers that source bananas from these countries.  

In Colombia, IDH is supporting a new collaboration with the Dutch trade union CNV to pilot the Fair Work Monitor in the banana sector as well as train trade union leaders on the concept of living wages so that they can incorporate this in their CBA negotiations.  

These focused projects are important, but retailers and IDH will explore in the years to come how to institutionalise these efforts through a public-private partnership with ILO and its new Living Wage Program. IDH is also working with CNV to develop a Roadmap for collective bargaining to promote alignment with living wages, which is expected for June this year.  

Responsible Purchasing Practices  

Not only social dialogue and influence on national wage setting mechanisms but also paying prices that cover the costs of production and allow space for wage improvements as well as fair contracting and stable supplier relationships are core pillars to enable living wages.  

In 2024, IDH supported the development of a Responsible Procurement Practices  Framework for banana retailers.  As part of this work, retailers completed self‑assessments of their purchasing practices and received individual recommendations for improvement. In 2025, IDH partnered with the Ethical Trade Initiative, in collaboration with GIZ and participating national initiatives, to complement this with supplier‑led assessments of retailer practices. In total 8 retailers convened by IDH participated in this initiative. Consolidated and anonymised findings and recommendations from this work are expected to be published in July 2026. As a next step, IDH will follow up with retailers that participated in this project on how they will bring the recommendations to life. Other retailers will be encouraged as well to provide a clear action plan on responsible purchasing practices.  

Transparency

IDH and the participating retailers have been reporting on an annual basis on the progress of the commitments. This reporting is being evaluated and improved on a yearly basis based on new developments and learnings.   

As such, in 2025 IDH introduced KPI’s related to volumes for which voluntary contributions have been paid. This year, we are evaluating these KPI’s and discussing with retailers whether new ones need to be added. Further, we are discussing with retailers how to increase transparency on actions, either by adding more individual insights on their progress in the joint reporting or agreeing on minimum individual reporting. We will also continue the conversation with other partners like standards to get more valuable data from them related to retailers action.