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A group of investors – including Legal & General Investment Management (LGIM), Hermes EOS and BMO Global Asset Management – has called on 15 companies with economically vulnerable staff to pay them the real living wage.
The real living wage, as opposed to the minimum wage enforced by law, is the wage rate based on how much people need to live.
In letters sent to chief executives on Thursday, the investors said there is a growing business case proving that living wage accreditation boosts productivity.
They also said that paying a fair wage reduces the risk of negative reputational or operational damage as a result of disruptions caused by industrial action.
The companies chosen include Just Eat, JD Sports, and Royal Mail. They are some of the largest in the UK listed on the FTSE 100 and FTSE 250, and rely on working contracts that do not include a living wage – which the group of investors says presents risks to the long-term sustainability of the companies.
Pauline Lecoursonnois, engagement professional for Hermes EOS, Hermes Investment Management, said: “The case is clear: 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.”
Other companies facing demands include United Utilities, British Land, Rentokil, International Consolidated Airlines Group and Smurfit Kappa.
The coalition of investors is made up of 21 asset managers, pension funds, stewardship service providers and charitable investors.
The call on firms was sparked by the announcement of new living wage rates on November 21.
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