
A £2.3 trillion asset group calls for businesses to align wages with inflation and address pay inequalities.
A coalition of 15 investors managing over £2.3 trillion in assets has urged the UK’s largest firms to raise wages for their lowest-paid employees in line with inflation. The group, which includes the investment arms of major insurance companies like Axa, Aviva, and Legal & General, has issued a letter to business leaders setting out their expectations for the year ahead.
The letter, coordinated by the responsible investment organisation ShareAction, calls for action from leading companies, including Tesco, JD Sports, ITV, Boohoo Group, and Entain. These firms are set to face scrutiny at their annual general meetings (AGMs) on how they are addressing the growing wage disparity between high and low earners, especially amidst the rising cost of living.
ShareAction plans to release a list of companies that engage with the investors’ demands at the conclusion of AGM season, usually after May, highlighting their progress and responses. The investors believe that the lowest-paid workers should receive pay increases that at least match the current consumer price inflation rate, which stood at 10.4% in February.
Research has shown that the cost-of-living crisis has hit lower-income households hardest, as they spend a larger share of their income on essentials, such as food and electricity, which have seen significant price increases. A recent report from the Trades Union Congress noted that 2022 saw the worst real wage growth in nearly 50 years, with take-home pay failing to keep up with rising living costs.
Vaidahee Sachdev, senior impact analyst at Aviva Investors, emphasised that businesses must acknowledge their “critical role” in addressing inequality and that their actions are key to ensuring future prosperity. She added that investors must hold companies accountable for contributing to long-term systemic risks, such as widening inequality.
Dan Howard, head of Good Work at ShareAction, warned that the current economic crisis could exacerbate income disparities unless companies take responsibility. “Investors are calling on businesses to provide fair wages and decent contracts across their supply chains, not just to protect workers during the cost-of-living crisis but also to serve the long-term interests of both the business and society,” he said.
He also cautioned that companies that ignore these calls could face increased pressure from shareholders in the future.
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The first day’s journey was through the pink fields
The first day’s journey was through the pink fields