Investors press Britain’s biggest firms to lift wages of lowest-paid staff
A group of 15 investors worth more than £2.3 trillion in assets under management signed the letter calling on UK businesses to protect staff.
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Your support makes all the difference.A group of investors managing more than £2.3 trillion in assets have urged some of Britain’s biggest businesses to lift their lowest paid workers’ wages in line with inflation.
The 15 firms – including the investment divisions of insurance giants Axa, Aviva and Legal and General – signed a letter setting out their expectations of companies this year.
Responsible investment group ShareAction, which coordinated the letter, warned that businesses who fail to listen can expect to “feel more heat” from investors next year.
It is set to press some of the UK’s largest listed companies including Tesco, JD Sports, ITV, Boohoo Group and Entain, at their annual general meetings (AGMs).
The companies will be asked how they are addressing inequalities between higher and lower paid staff amid cost pressures, through fair pay policies.
ShareAction is set to publish a list at the end of AGM season – which is typically after May – of companies that engaged with the asks, their progress and any explanations given.
Businesses that fail to listen can expect to feel more heat from shareholders next year
“As far as possible, lowest paid workers should receive pay rises that meet the current rate of inflation, as measured by consumer prices index (CPI)”, the letter read.
CPI inflation hit 10.4% in February, unexpectedly jumping higher and driven by a surge in the prices of food and drink.
Reports have shown that lower-income households are being hit harder by cost-of-living pressures because a greater proportion of their income goes on essentials, like food and electricity, which have seen the biggest price spikes.
And a report from the Trades Union Congress at the end of last year found that 2022 was the worst year for real wage growth in nearly half a century – meaning people’s take-home pay after the cost of living is taken into account.
As investors we must play our part in holding companies to account where short-termism exacerbates long-term systemic risks such as inequality
Vaidahee Sachdev, senior impact analyst for Aviva Investors, said businesses know the “critical role they play in society” and that their actions will be “instrumental” to future prosperity.
She added: “Longer term, we call on companies and government to step up their actions to tackle the problem of growing inequality in this country.
“As investors we must play our part in holding companies to account where short-termism exacerbates long-term systemic risks such as inequality.”
Dan Howard, head of Good Work at ShareAction – the campaign behind the investor statement, warned there is a risk that the current crisis will widen disparities in income.
“This is why investors are calling on companies to pay fair wages throughout their supply chains and provide decent contracts, which not only protect their workers in the immediate cost-of-living crisis but also serve the long-term interests of the business and society”, he said.
“Businesses that fail to listen can expect to feel more heat from shareholders next year.”