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Protect your low-paid workers or we won’t back executive rises next year, top firms are told

03 October 2022

Church investors lobby 100 of the largest publicly listed companies in the UK

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Combined, the 100 companies employ around five million people, not including contractors, such as cleaners and security staff, who also work on their sites

Combined, the 100 companies employ around five million people, not including contractors, such as cleaners and security staff, who also work on their ...

CHURCH and charity investors are lobbying 100 of the largest publicly listed companies in the UK to take action in support of their lowest-paid employees through the cost-of-living crisis.

CCLA Investment Management, which manages responsible investments for charities, religious organisations, and the public sector, and the Church Investors Group, which represents investors of various denominations and church-related charities, have written to companies in which they invest to express “deep concern” about the effects of sharply rising living costs.

They will not, they write, be voting for executive pay rises next year unless businesses “take steps to shield their lowest paid workers” from the effects of the crisis.

“We appreciate that the business outlook — with increased energy costs, supply chain challenges and rising prices — is challenging and uncertain, but we do not want to see those on lowest income bearing an unfair burden that they will find difficult to meet,” the letter, published last Thursday, says.

“The crisis has a disproportionate impact on low wage households who spend a larger proportion of their income on fuel and food.”

The Living Wage Foundation reported last month that 78 per cent of the 2000 low-paid workers in its poll (below the national living wage) said that the cost-of-living crisis was the worst financial period that they had experienced.

The 100 recipients of the letter, which include AstraZeneca, BT, HSBC, Shell, and Unilever, have a combined market capitalisation of £1.7 trillion and employ around five million people, not including contractors, such as cleaners and security staff, who also work on their sites.

The letter argues that employees under mental strain and financial pressure were “unlikely to perform at their best and businesses are likely to face reduced productivity, higher turnover and increased training costs”.

It asks what steps the companies have taken to support their lowest-paid employees, what proportion of their workforce would benefit from such plans, and whether outsourced staff would be eligible for assistance. If no plans are in place, it asks whether the company will be acting on the issue. One-off payments and hardship funds are given as examples of ways to help.

The letter, signed by the chief executive of CCLA, Peter Hugh Smith, and the chair of the Church Investors Group, Canon Edward Carter, concludes: “Beyond the short-term pressures as long-term investors we recognize growing inequality is a systemic risk and wish to see efforts to drive inclusive growth.

“We are currently updating our Voting Guidelines and will not vote in support of executive pay rises next year if businesses have not taken steps to shield their lowest paid workers from the impacts of the rising cost of living.”

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