Is your supermarket a responsible employer?

In this week’s episode of the ‘PAYING FOR GOOD’ podcast, I welcome Simon Rawson, Director of Corporate Engagement at UK non-profit ShareAction. Simon works with institutional investors and companies primarily in the UK and Europe. His mission at ShareAction is to build an investment system that is responsible for its impacts on people and the planet. He works on issues like climate change, nature, health, and decent work. My conversation with him focuses on the latter, with a look at living wages in the grocery retail sector.

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You will recall from my previous episode on wage inflation with Nigel Marriott that there are two levels of minimum hourly wages. They are the:
• government-set National Living Wage: £9.50 for those aged 23 and over
• real living wage, calculated by the Living Wage Foundation using the price of goods: it recently increased to £10.90 across the UK and £11.95 in London

As part of its corporate engagement on minimum pay, ShareAction works with the Good Work Coalition, a group of investors who manage pensions and personal savings. For the past decade, they have been focusing their efforts on supermarkets who employ many low-paid workers.

ShareAction would like supermarkets to follow the 11,500 organisations that have already become living wage employers. The industry would then have to commit to paying its direct employees and contract staff a minimum of the real living wage on an on-going basis.

Due to the lack of progress on this request, ShareAction and the coalition felt compelled to file a shareholder pay resolution to raise this important issue to the top table as it prevails across the sector. They chose the Sainsbury’s AGM in July.

The announcement of this resolution had a mixed reaction. Some investors like Nest actively supported it while others, like Schroders, were openly against it. In our conversation, both Simon and I agree that voting against such a proposal undermines an investor’s position as a signatory to the UN Principles for Responsible Investments.

Of course, paying the real living wage incurs an extra cost. But organisations that have signed up to the Living Wage Foundation boast fewer sick days, more motivated employees, and higher productivity, factors which they feel have paid back the upfront cost. Paying workers a minimum of the real living wage is also good for business and for society, especially during the cost of living crisis and in this high inflation environment.

Despite the Sainsbury’s pay resolution only attracting 17% of votes in favour and not the 75% required to pass, the supermarket giant now pays all directly employed staff the equivalent of the real living wage. Unfortunately, it has not yet made an ongoing commitment to do so and ancillary staff (like security guards and cleaners) were not included in this round of pay rises.

ShareAction will continue its engagement with supermarkets and investors to advance this pay issue. Its ambition is to broaden its work outside the UK too. The minimum real living wage is not just a national prerogative but an international necessity. This is understood by organisations with the most advanced sustainability agenda who have already set real living wages across their international operations.

As part of its focus on decent work, ShareAction also calls for better job security and gender and ethnicity pay equity.

If you’re interested in ShareAction’s campaigns, you can sign up to receive its newsletter. You can also become one of their supporters. You will then receive the necessary training to ask pertinent questions at AGMs on sustainability topics of interest to you and material to the long-term future of public firms, which we all own.

Whatever sector you’re in and however big or small your organisation is, base pay, incentives, benefits and pensions are all part of your Responsible Reward offering. By linking your sustainability and remuneration strategies, you become an employer, an investment and an investor of choice. If you wish to explore this topic further, feel free to book a call with me.