Major investors including Axa and Scottish Widows are backing shareholder resolutions pressing retailers Next, Marks & Spencer and JD Sports to increase pay for thousands of workers.
More than 100 individuals and eight institutional investors, which manage over £1 trillion in assets, are backing an effort to encourage companies to pay a “real living wage”, which is designed to ensure workers can cover necessary household costs.
The move comes amid evidence that almost a quarter of UK retail workers — 818,000 people — are not being paid the rate tracked by the Living Wage Foundation, which accredits employers.
The real living wage — which is voluntarily paid by more than 15,000 UK businesses — is £13.85 an hour in London, and £12.60 in the rest of the UK, while the statutory minimum wage is scheduled to increase by 6.7 percent to £12.21 from next month.
Catherine Howarth, the chief executive of campaign group ShareAction which is coordinating the effort, said: “The UK’s biggest retailers are failing to support their workers with a real living wage, leaving hundreds of thousands of people in the sector struggling to make ends meet.
“Companies whose workforce earn less than a real living wage are ultimately harming the vitality and growth of the UK economy, with business models that put pressure on workers, their families and the state by adding to health and welfare costs.”
Seven institutional investors including Axa Investment Managers, Scottish Widows, Trust for London, the Greater Manchester Pension Fund and Cardano Group are co-filing a resolution on the issue at Next’s annual shareholder meeting on 15 May.
The detailed resolution calls on Next, which releases its annual results on Thursday, to prepare a report on how many of its workers, including contractors, are paid below the real living wage and to carry out a cost/benefit analysis of making the independently verified rate its new minimum.
The resolution claims that Next’s current pay rates may mean it cannot meet its stated aim to create a workplace where everyone is “treated fairly and with respect, listened to [and] motivated to achieve their full potential”.
Similar resolutions are being put forward at JD Sports’ and M&S’s annual meetings — both of which will be held in July. Friends Provident Foundation and Scottish Widows are supporting both resolutions, with Cardano Group adding its backing at JD Sports.
Charlie Crossley, the investment engagement manager at Friends Provident Foundation said: “If more major companies committed to real living wage accreditation, it would empower thousands of workers to meet everyday costs and save for life’s critical moments.
“It would also advance workplace equality — key to maintaining social cohesion and long-term economic stability. Meaningful change requires sector-wide progress. That’s why investors are co-filing resolutions across multiple companies.”
JD Sports currently pays all staff the legal minimum for those aged 21 and over with nothing extra in more expensive areas such as London. Next pays only staff who are over 21 that minimum, with some extra in London. M&S pays the real living wage to employees but does not guarantee it for third-party contracted staff such as security guards and cleaners.
M&S said it already paid employees at least the real living wage, irrespective of age, as well as benefits including staff discount and a competitive pension. A spokesperson added: “We strongly believe that our third-party contractors should also pay their employees fairly. We welcome open dialogue with all of our shareholders, including engagement with ShareAction.”
A JD spokesperson said: “All JD UK retail colleagues are compensated above the national living wage for those aged 21 and above, alongside a comprehensive benefits package available from the first day of employment.”
By Sarah Butler
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