The investors – who include Legal & General Investment Management, Hermes EOS, BMO Global Asset Management and Friends Provident, as well as a number of pension funds and charitable trusts – make it clear that they are putting their weight behind the ShareAction campaign to encourage businesses to sign up for Living Wage accreditation.
They argue that paying a fair wage boosts productivity, reduces staff turnover, improves employee relations and reduces the risk of negative reputational or operational damage caused by industrial action.
“The case is clear,” says Pauline Lecoursonnois of Hermes Investment Management. “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.”
The targeted companies depend on working contracts that do not include a Living Wage provision. They therefore run the risk of damaging their long-term sustainability, the investors believe.
The 15 comprise some of the UK’s household names: 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, and Royal Mail.
ShareAction’s campaign is aimed at mobilising savers and investors to persuade the UK’s biggest companies to commit to ensuring all their workers earn enough to live off.
So far, 36 of the FTSE 100 and more than 4,800 companies across the country have signed the accreditation standard of the Living Wage Foundation which requires them to pay the Living Wage rates to their staff, including those employed through contractors on their UK sites. Recent signatories include Intertek, Croda International, Diageo and Landsec.
Commenting on the investors’ letters, ShareAction campaign manager Mara Lilley 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.”
The current Living Wage rates are £10.55 in London and £9 for the rest of the UK.