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A group of investors have put their support behind a shareholder resolution that could see all Sainsbury’s employees secure the real living wage when it goes to a vote at Sainsbury’s AGM on 7 July.
The resolution, co-ordinated by ShareAction, is set to be the first Living Wage resolution to be filed at a UK company. It is said to already have the support of co-filers managing £2.2trn, including Legal and General, Nest, and Brunel Pension Partnership.
More recently, Coutts and Co, the Coal Pensions Board, and Global Systemic Investors have also declared their intention to support the proposal, which ShreAction said is “increasing pressure on other investors to follow suit”.
Leslie Gent, head of Responsible Investing at Coutts and Co, said: “We recognise the positive progress made by Sainsbury’s to match the Living Wage for its directly employed staff. As a Living Wage Employer ourselves we believe that this accreditation would set a standard for all UK supermarkets, and would provide the certainty and transparency that helps attract a high-quality workforce, today and in the future.”
ShareAction said it was now in talks with several other investors and “expected additional declarations of support in the coming days”, describing the resolution as a “litmus test for investors’ social commitments amid the cost-of-living crisis”.
While Sainsbury’s previously agreed to raise pay for staff in outer London, meaning all its directly employed workers now receive a wage equal to or above the current real living wage rates, ShareAction said it has “refused” to do the same for third-party contractors, such as cleaners or security guards.
In May, Sainsbury’s chairman Martin Scicluna then wrote to all shareholders asking them to vote against the resolution.
He said: “Accrediting as a Living Wage employer would mean that a third party – the Living Wage Foundation – would decide our colleague pay changes each year… We believe it is right for the Company and our stakeholders to make independent decisions regarding pay and benefits, rather than have them determined by a separate external body.
“We hope that our track record demonstrates that we are committed to paying a fair wage to our colleagues, while also acting in the best interests of all our stakeholders. We will continue to monitor pay and are continually and actively looking at how we can support our colleagues and our customers with the current cost of living crisis.”
He added: “Fundamentally, we believe it is right for the Company and our stakeholders to make independent decisions regarding pay and benefits, rather than have them determined by a separate external body. I hope the explanation in this letter helps you understand the Board’s recommendation that you vote against the ShareAction resolution at the AGM.”
ShareAction argued that living wage accreditation would not mean that Sainsbury’s would lose control over its wage levels, however, noting that the Living Wage Foundation “would merely set the minimum level, much as Sainsbury’s currently retains control over its wages despite the existence of a legally mandated national minimum wage”.
Rachel Hargreaves, campaigns manager, ShareAction said: “There is no excuse for a highly profitable company with multimillion pound executive salaries refusing to guarantee all its staff, including subcontracted workers, a basic standard of living.
“Not only is the moral case compelling, there is a clear business case for employers. Further, low pay drives inequality which slows economic growth and stokes instability, presenting material risks to investors. We expect investors to support this resolution. The country will be watching closely to see how they vote.”
