Institutional investors criticise UK’s biggest companies over workers’ pay
28 Nov 2019
Some of the UK’s largest companies, including Royal Mail, JD Sports and Hargreaves Lansdown, have been told to improve workers’ pay rates in a letter signed by 21 asset managers, pension funds, stewardship service providers, and charitable investors
28 Nov 2019
The move is part of a campaign, coordinated by pressure group ShareAction, to encourage wider take-up of the living wage, which were increase this month to £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.
Signatories to the letter included Legal and General Investment Management, Hermes EOS, BMO Global Asset Management, and Nest, who together manage or advise on nearly £2 trillion of investments.
They argue that living wage accreditation has been 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, which they say is 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. United Utilities, British Land, Rentokil, International Consolidated Airlines Group, and Smurfit Kappa are among those receiving the letter.
Currently 38 of the FTSE 100 companies pay the living wage.
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.’