G7 leaders have agreed to establish a new fund to help improve the global supply chain in the wake of the Rana Plaza disaster in Bangladesh.

The fund would help provide compensation in the event of further similar disasters and provide cash to improve fire inspection and building safety regulations.

The fund would be administered in conjunction with the International Labor Organisation and require contributions from trade associations in developed countries represented at the G7.

It would act as an insurance system for firms that commit to prevention measures and help implement labor, social, environmental and safety standards such as better-trained fire prevention inspectors.

Extremely low wages have led global brands and retailers to choose Bangladesh over China and other developing countries in recent years, but in many cases the big brands have either turned a blind eye to working conditions in pursuit of profit or knowingly taken no interest in how their clothes are manufactured.

The Rana Plaza collapse prompted demands for reforms.

G7 countries have an important role to play in promoting labor rights, decent working conditions and environmental protection in global supply chains.

The G7 will recommend that western consumers have access to apps that better inform them about whether clothes they intend to buy were manufactured in decent working conditions.