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Aviva Investors and LGIM back cost of living support campaign

The fund groups are among 16 investors with £3.2trn in assets under management that have responded to a call to action from CCLA Investment Management, a responsible investment fund house and the UK’s largest charity investment manager.

CCLA, jointly with the Church Investors Group, has sent a letter to 100 of the UK’s largest listed employers urging them to consider uplifting pay for the lowest paid workers, and providing one-off cost-of-living support.

The campaign wants companies to meet the new real Living Wage rates of £10.90 per hour across the UK and £11.95 in London. 

FCA finds 60% of adults are struggling with cost-of-living increases

Only 25 of the 100 companies written to confirmed they are accredited real Living Wage employers. Six stated they benchmark wages against the real Living Wage but are not accredited.

CCLA will be updating its voting guidelines next year and for those companies that fall short in protecting their lowest-paid workers from the crisis, it will not vote in support of increases in executive pay.

Peter Smith, CCLA chief executive, said the overall percentage of those companies that have indicated they are providing extra measures of support for their own low-paid employees is “astonishingly low”.

He said: “Millions of working people are facing a very hard winter and UK businesses should be vigilant in ensuring that their lowest paid are protected through the winter months. 

“The idea that there are employed people who do not earn enough to support themselves, to eat healthily and have a safe and warm environment in which to live, is morally wrong and financially unsustainable.”

Making a direct link between a good investment and doing the right thing, Smith said: “Healthy financial markets depend on healthy communities that can afford to purchase the everyday products and services businesses produce.”

In at least one case, despite a significant increase, one company’s level of pay for its low-paid workers still remained below the real Living Wage, the campaign found in responses to its letter.

In another case, NatWest Group decided to make a permanent 4% (average £1,000) increase to pay for those earning under £32,000.

Autumn Statement 22: Cost of living help set out for energy, pensions and wages

Banks were found to be providing the broadest response to the cost of living crisis for employees. HSBC gave one-off bonuses to 17,000 staff and Lloyds Banking Group gave bonuses to 63,000 staff.

Other campaign requests include working with unions to reach agreements on pay claims to avoid prolonging any potential disruption, and likewise with third-party contractors to ensure support for staff that work on the company’s premises.

The campaign also wants the companies to limit price increases of key goods and services.

It has called on the 100 publicly listed companies who have been sent the letter to “publicly state how they intend to support workers and consumers over the foreseeable future”.

It also wants them to agree to provide a regular update at least once in six months, “given the unpredictable and long-term nature of the crisis”.

CCLA will write again to the list of 100 companies in March 2023 to ask for an update and to monitor progress made.

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