A group of large investors has written to 15 leading public companies with economically vulnerable staff – including Just Eat, JD Sports, and Royal Mail – encouraging them to pay their staff the real Living Wage.
Sparked by the announcement of the new Living Wage rates in November, 21 asset managers, pension funds, stewardship service providers, and charitable investors – including Legal and General Investment Management, Hermes EOS, BMO Global Asset Management, and Nest – sent letters today to the companies’ chief executives in a campaign coordinated by ShareAction. Together they manage or advise on nearly £2 trillion.
Investors outline the growing business case for Living Wage accreditation which has proven to boost productivity, reduce staff turnover and improve employee relations. Paying a fair wage also reduces the risk of negative reputational or operational damage as a result of disruptions caused by industrial action, a particularly pertinent point in light of recent strike votes at Royal Mail.
The companies chosen, some of the largest in the UK listed on the FTSE 100 and FTSE 250, rely on working contracts that do not include a Living Wage and therefore present risks to the long-term sustainability of the company.
Other companies facing demands include United Utilities, British Land, Rentokil, International Consolidated Airlines Group, and Smurfit Kappa.
Investor understanding and support for the Living Wage is continually building. More broadly, the Living Wage Investor Coalition, coordinated by ShareAction, recently welcomed new members including Legal & General Investment Management and PensionBee, the pension provider, bringing the total number of institutional investors to 29 with £2.4 trillion in assets.
Nearly 6,000 businesses are celebrated for paying their workers a fair wage, including 38 of the FTSE 100.
Mara Lilley, Campaign Manager at ShareAction, said: “We’re pleased that this progressive group of investors is using its influence to ensure workers don’t suffer the indignity of ‘just scraping by’. Against the background of economic uncertainty and the ever-changing nature of work, it is vital that basic workers’ rights, including fair wages, are protected and respected by all. These companies have the opportunity the throw a lifeline to all their workers and help stem the rising tide of in-work poverty.”
Pauline Lecoursonnois, Engagement Professional – Hermes EOS, Hermes Investment Management, said: “The case is clear: a workforce that is fairly paid, well valued and respected will perform better than one that isn’t and therefore we are asking UK companies to consider paying the Living Wage as a key indicator of a responsible and sustainable business."
Diandra Soobiah, Head of Responsible Investment - Nest said: “There's clear evidence that paying the Living Wage has significant business benefits as it can lead to a more engaged and productive workforce which in turn should make the employer more profitable and successful. Investing in organisations that are well-run with sound social practices helps achieve sustainable returns for our 8.5 million members as they would expect. In addition it also happens to be the right thing to do. We hope to see all our investee companies in the UK show leadership by accrediting as Living Wage employers in 2020”
Clare Reilly, Head of Corporate Development at PensionBee, said: “As a London Living Wage employer PensionBee is proud to be the newest member of the Living Wage Investor Coalition. Along with our co-signatories we call upon all FTSE100 companies, particularly financial services companies, to start paying their staff a fair wage. Listed companies have a privileged position in our economy and should demonstrate leadership on matters of social fairness. At PensionBee, we believe fair compensation impacts employee happiness and productivity, ultimately leading to an excellent service for our customers who wish to combine their pensions with us”
Graham Griffiths, Head of Partnerships and Operations at the Living Wage Foundation said: “Almost 40% of the FTSE 100 are now accredited Living Wage employers and committed to paying all staff - whether directly employed or contracted - a real Living Wage. This year we’ve seen the fastest growth in the number of businesses joining the Living Wage movement. We anticipate that soon we’ll hit a tipping point where FTSE 100 companies who aren’t accredited and paying staff a decent wage will be in the minority, so we’d encourage all those that aren’t accredited to get in touch with us about becoming a Living Wage Employer before they are left behind.”
Notes to editors:
- For more information, please contact Beau O’Sullivan at firstname.lastname@example.org or +44203 475 7859
- Companies receiving a letter include JD Sports, Just Eat, Hargreaves Lansdown, British Land, Rentokil Initial, Aveva Group, Flutter Entertainment plc, Phoenix Group, Halma, DCC, International Consolidated Airlines Group, United Utilities, Polymetal International, Smurfit Kappa. FTSE 250: Royal Mail.
- Investor signatories to the letters include: BMO Global Asset Management, Barrow Cadbury, Candriam Investors Group, EdenTree Investment Management, Friends Provident Foundation, Hermes EOS (Signed by stewardship provider, Hermes EOS on behalf of its clients), Islington Pension Fund, Jesuits in Britain, Joseph Rowntree Charitable Trust, Lankelly Chase, Legal and General Investment Management, Nest, Norfolk Pension Fund, Paul Hamlyn Foundation, PensionBee, Strathclyde Pension Fund, Trust for London, and the Tudor Trust.
- Some signatories wish to remain private.
- The new rates, announced by the Living Wage Foundation on 11 November 2019, are £10.75 per hour in London, and £9.30 throughout the rest of the UK. This is higher than the National Living Wage of £8.21, the legal minimum for workers aged 25 and over.
- 38 companies in the FTSE 100 have shown leadership in accrediting as a Living Wage employer. As a result, over 15,000 workers have received a wage uplift equating to a combined pay rise of £60 million.