Various institutional investors – including ACTIAM, Aviva Investors, Legal and General Investment Management (LGIM) and NEST – are calling for companies to provide adequate support for lowest paid workers this annual general meeting (AGM) season to help cope with the current cost of living crisis.

The group of 15 investors worth £2.37trn (€2.7trn) of assets under management, which are being led by ShareAction, have all signed a statement urging businesses to:

  • ensure the lowest-paid workers, who are disproportionately impacted by the rising cost of living, are adequately targeted in pay awards that meet the current rate of inflation;
  • commit on a long-term basis to paying the real living wage to all employees across supply chains, including third-party contracted staff; and
  • provide secure work, through guaranteed working hours and fair and accurate contracts.

The investors form part of ShareAction’s Good Work Coalition, which will write to companies ahead of their AGMs asking boards about their position on these asks.

ShareAction will attend the AGMs of companies such as Deliveroo, Sainsbury’s, Tesco, Next and JD Sports on behalf of the coalition to push the firms to address inequality in a cost of living crisis through fair remuneration policies.

Evidence shows that low-income households are already buckling under the pressure of the cost of living, with 7.2 million going without basic goods and services while 4.7 million are behind on paying their bills, according to a report published by the Joseph Roundtree Foundation.

Dan Howard, head of good work at ShareAction, said: “The harshest effects of the cost of living crisis are being felt by workers on low wages and those on insecure contracts, who are being forced into difficult choices on how they can meet their families’ everyday needs.

“With workers currently experiencing the longest pay squeeze in more than 200 years, there is a risk that the current crisis will further widen disparities in income and wealth that create systemic risks for our wider economy and society as a whole.”

He noted that this is the reason why why investors are calling on companies to pay fair wages throughout their supply chains and provide decent contracts, that not only protect their workers in the immediate cost of living crisis but also serve the long-term interests of the business and society.

”Businesses that fail to listen can expect to feel more heat from shareholders next year,” he said.

Marie Payne, responsible investment officer at ACTIAM, said: “Good human capital management, including the provision of a living wage, is part of a company’s social license to operate and it matters even more in the current context of a cost of living crisis. Companies have a responsibility towards their employees, especially the most vulnerable, to support them in these challenging times.”

She added: “This also helps address the long-term systemic risk which the cost of living crisis represents, as identified by the World Economic Forum in its 2023 Global Risk Report. Through this statement, we urge companies to act with the interests of their lowest-paid workers in mind.”

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