The UK’s first ever Living Wage resolution secures 17% of shareholder support
(Thursday 7th July, London) Today, the Living Wage resolution filed at Sainsbury’s, co-ordinated by responsible investment NGO ShareAction, received the support of 16.7% of investors at the company AGM. A further 2.6% abstained.
This is despite two major proxy advisors, Glass Lewis and ISS, as well as the Sainsbury’s board, encouraging investors to vote against the resolution.
In April, the resolution led to the supermarket announcing a pay uplift for London staff so that all directly employed staff currently earn the Living Wage meaning an estimated 19,000 workers received a pay rise. However, the resolution remained on the ballot due to investor calls for subcontracted staff like cleaners and security guards to be guaranteed a Living Wage, and for the company to make a long-term Living Wage commitment to its employees.
Rachel Hargreaves, Campaign Manager at ShareAction, said “Today’s vote sent a powerful message from shareholders that Sainsbury’s should make a Living Wage commitment to all of its workers. Investors have shown that they can and do support pay rises for the low paid. Equally, we’re disappointed that a large proportion shareholders chose to prioritise short-term returns over the real long-term issue: rising inequality in our society. As we deal with the continued effects of the cost-of-living crisis, the conversation round low pay isn’t going to go away, and both employers and investors need to step up. We look forward to hearing how the company will address shareholder concerns.”
The resolution was tabled by ten investors managing £2.2 trillion in assets, including the UK’s largest asset manager, Legal and General Investment Management and the largest workplace pension scheme, Nest, alongside 108 individual shareholders from a wide range of backgrounds, including Sainsbury’s workers, two MPs, a barrister and advocates on the need to tackle low pay.
Over the past two weeks, several institutional investors came out in support of the resolution, such as Aviva Investors, Coutts and Co, GSI and the Coal Pensions Board.
Last Thursday, a group of individuals led by Organise and 38 Degrees handed in a petition of over 100,000 signatures calling on the supermarket to accredit as a Living Wage employer, in addition to a report featuring testimonials from Sainsbury’s staff on the challenges they face in the current economic climate.
Whilst more than half of the UK’s largest FTSE 100 companies are Living Wage employers, alongside more than 10,000 other companies across the country, there are currently no accredited Living Wage supermarkets.
The resolution has drawn back the curtain on the treatment of workers who are employed through third party contractors, who are often effectively invisible in corporate reporting.
It has also thrust into the spotlight, the institutional investors and asset managers who invest on the behalf of people across the country, forcing them to answer the question as to whether they will take responsibility for the impacts of their investments on society.