A statutory minimum wage is not necessarily the same as a wage that a person can live on. That is why Nybo Workwear works with living wages as part of our human rights efforts in the supply chain.

A living wage is the wage an employee should receive for a normal working week in order to secure a decent standard of living for themselves and their family. It should, among other things, be sufficient to cover food, housing, healthcare, education, transport, clothing and the ability to deal with unexpected expenses. Overtime should not be necessary to reach this wage level.

At the same time, we know that living wages are not an issue that can be solved through one requirement or one payment. Wage levels are influenced by, among other things, local conditions, company wage structures, customers’ purchasing practices and the influence individual customers have with suppliers. We therefore work gradually, on a risk-based basis and in close dialogue with our suppliers.

Our Strategy

Our long-term goal is that all in-scope manufacturing suppliers can demonstrate by 2050 that relevant workers receive at least a living wage.

The path towards this goal is divided into several phases. In the period 2026–2028, our main focus is to establish a robust system, improve our wage data, carry out our first pilot project and develop a model that can later be applied to additional suppliers. After that, the aim is to gradually expand the methods that prove effective.

Our approach is based on five core principles:

• We prioritise our efforts based on risk and the scale of the identified challenges.
• We work through dialogue with suppliers rather than relying only on requirements.
• We require documentation showing that measures provide a genuine additional benefit to workers.
• We see living wages as a shared responsibility in which suppliers, Nybo and other customers can all have a role.
• We use our experience to continuously improve our approach.

We have brought this work together in a Living Wage Management System that connects risk analysis, supplier dialogue, pilot projects, documentation, monitoring and evaluation in one recurring process.

How We Measure the Wage Gap

The first step is to understand the difference between the wage actually paid and the wage considered necessary for a decent standard of living.

We therefore carry out a wage gap analysis at least annually for our active manufacturing suppliers. In this analysis, we compare the reported ordinary wage with a relevant living wage benchmark.

We use recognised reference values, primarily from the Anker Research Institute, which develops country- and region-specific living wage benchmarks. Our current analysis includes reference values for, among others, India, China, Laos and Tunisia.

The analysis shows that wage gaps still exist at several of our manufacturing suppliers and that the size of the gap varies significantly between countries and production sites.

We do not disclose individual suppliers’ wage data. Instead, we use the data to assess where the risk is highest, where data quality needs to be improved and where concrete action can have the greatest effect.

A wage gap is not assessed in isolation. We also consider:

• the size and quality of the available wage data,
• the number of workers potentially affected,
• conditions in the country of production,
• the supplier’s willingness and ability to cooperate,
• our own influence through the commercial relationship,
• and which measures can realistically create improvements.
  
  

How We Work in Practice

Our living wage work follows a recurring process.

First, we collect and assess wage data. We then prioritise the suppliers where the risk or wage gap requires particular attention. Living wages then become part of the dialogue with the supplier, where we discuss, among other things, wage structures, bonuses and allowances, wage development and opportunities for concrete improvements.

If dialogue alone is not expected to create sufficient progress, we may establish a pilot project with specific objectives, documentation requirements and ongoing follow-up.

When Nybo provides a financial living wage contribution, it must be an additional contribution to the worker. It must not replace ordinary wages, statutory wage increases, bonuses or existing allowances. We therefore require documentation that allows us to trace the funds and verify that workers actually receive the intended benefit.

We monitor implementation through, among other things, anonymised wage data, payroll summaries, documentation of wage development and declarations from factory management. Pilot projects are also evaluated so that the experience can be used in future initiatives.

Our First Pilot Project

In 2026, we launched our first concrete living wage pilot together with a long-standing business partner and a manufacturing factory in China.

The purpose is not simply to transfer a financial contribution. We want to test whether we can establish a model that is:

• practical for the factory to administer,
• traceable from Nybo to the workers,
• verifiable,
• and suitable for later use with other suppliers.

The pilot was prepared during 2026, and the first contribution is planned for the first quarter of 2027, provided that the necessary administrative and technical processes are in place.

The planned model starts with a contribution from Nybo of 1% of the ordinary base wage in 2027 and up to 2% from 2028. In the longer term, the ambition is to involve other customers and the factory itself, so that the total effect can become greater than what Nybo can create alone.

Our business partner and the factory are currently investigating whether it is technically possible to show the living wage contribution as a separate item on employees’ payslips. This is important because we want to be able to document that the contribution is additional and is not simply absorbed into other wage components.

Once the pilot becomes operational, it will be reviewed quarterly with a focus on payment, documentation, wage development, any deviations and lessons learned. The overall pilot will be evaluated at the end of 2027.

What We Have Learned So Far

One of our most important learnings is that working with living wages is more complex than simply calculating the difference between the current wage and a benchmark.

If we want to make a financial contribution, we must also be able to document that the contribution:

• reaches the workers for whom it is intended,
• is a genuine addition to their ordinary wage,
• is not offset by lower bonuses or other wage components,
• and can be administered in a way that works within the factory’s existing payroll system.

This is why we have developed a more structured documentation and monitoring system around our first pilot.

We have also learned that data quality is critical. Base wages, bonuses, allowances, employer costs and overtime can be reported differently from country to country and from supplier to supplier. If the data are not comparable, a calculated wage gap may give a misleading picture. We are therefore working to improve the quality and comparability of our wage data.

Another challenge is our own size and level of influence. At a supplier with a significant wage gap, a contribution from Nybo alone cannot close the gap. We therefore see our own contribution as one part of the solution and aim over time to involve both the supplier and other customers in the work.

Living Wages Are Also Linked to Our Purchasing Practices

We cannot work credibly with living wages without also looking at the way we purchase.

Price negotiations, forecasting, order changes, lead times and supplier dialogue can affect suppliers’ ability to plan production and improve wages and working conditions.

We therefore link our living wage work to our responsible purchasing practices. The results of our purchasing practices analysis are used, among other things, to assess where we can improve our own processes and create better conditions for long-term improvements at supplier level.

Next Steps

In the coming period, our most important task is to move the first pilot from planning into practical implementation.

In 2026–2028, we focus on:

• improving and standardising wage data from our manufacturing suppliers,
• carrying out the first pilot and documenting its effect,
• evaluating what works and what needs to change,
• improving our own purchasing practices,
• and developing a model that can be applied to more suppliers.

From 2029–2035, the ambition is to gradually expand the methods that have proven effective to additional prioritised suppliers and to involve suppliers and other customers more actively in joint solutions.

In the longer term, we will continue to scale and improve our work towards our goal that all in-scope manufacturing suppliers can demonstrate payment of at least a living wage by 2050.

We do not expect the path towards this goal to be linear. Benchmarks change, wage systems differ, and our ability to influence varies from supplier to supplier. We will therefore continue to measure, learn and adjust our approach based on documented experience.