Today, a coalition of 15 investors worth £2.37 trillion of assets under management are calling on companies to take decisive action this AGM season to protect their lowest paid workers during the cost-of-living crisis.

Investors including the UK’s largest asset manager, Legal and General Investment Management and the largest workplace pension scheme, Nest, as well as ACTIAM, Aviva Investors and AXA Investment Managers 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;
• Provide secure work, through guaranteed working hours and fair and accurate contracts.

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 from 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.

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

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

Vaidahee Sachdev, Senior Impact Analyst at Aviva Investors said: “We call on companies to balance the interests of all stakeholders, paying particular attention to protecting the most vulnerable parts of their direct and indirect workforce and consumer base. As employers and as suppliers of essential goods, businesses know the critical role they play in society - their actions today will be instrumental in determining levels of prosperity tomorrow. 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.”

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. 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.”

Notes to editors

The full investor statement can be read here.

The investor signatories are: ACTIAM, Aviva Investors, AXA Investment Managers, Barrow Cadbury Trust, CCLA, Guy’s & St Thomas’ Foundation, Jesuits in Britain, Joseph Roundtree Foundation, Legal and General Investment Management, Nest, PensionBee, PIRC, Rathbones Greenbank Investment, Strathclyde Pension Fund and Trust for London.

ShareAction’s Good Work campaign aims to drive up employment standards and reporting within publicly listed companies. Through working with investors, investor representatives and other relevant stakeholders, the campaign promotes stretching standards that go beyond statutory minimums, assesses company progress against these and engages with companies to improve their employment practices. ShareAction’s Good Work Coalition brings together investors to improve the integration of employment standards into investment decisions and coordinate collaborative engagement with companies on relevant topics.