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A new report calls on finance professionals to drive change towards living wages as a critical factor in reducing inequality, advancing human rights and fostering sustainability. Produced by ACCA, Shift and Forvis Mazars, the report also reinforces findings that paying a living wage improves workers’ productivity, reduces staff turnover, and increases economic stability.
Mumbai, September 25, 2024: The report, ‘A living wage – Crucial for sustainability’, calls on finance and accountancy professionals to take immediate action in addressing wage inequality, highlighting the critical role they play in driving sustainable business practices and fostering social stability. The report underscores that without urgent intervention, wage disparities will continue to erode economic and social systems worldwide.
Using the insights from over 1,000 survey respondents across 93 countries and discussions with more than 50 finance and business professionals, the report provides compelling evidence for the socio-economic multiplier effect of living wages. It finds that paying a living wage benefits not only workers but also employers, economies, and governments.
Paying workers below a living wage is inconsistent with preserving and enhancing the value of human capital. Business and investor initiatives involving leaders from across all regions are increasingly highlighting the importance of paying living wages to reduce inequalities and the related risks to societies, economies and financial systems. Yet only 34% of the respondents felt that it was a responsibility which extended to their first-tier suppliers and even less beyond this.
The report highlights the undeniable link between living wages and sustainability, with 82% of global survey respondents recognising this connection. Living wages reduce inequality, boost economic stability, enhance business resilience, support human rights, strengthen supply chains, and meet growing regulatory and investor demands for socially responsible practices.
Helen Brand OBE, Chief Executive of ACCA, emphasised that: ‘Accountancy and finance professionals are held to the highest ethical standards. The right of all employees and contractors to a living wage is an ethical responsibility and as a result finance professionals have a unique role and opportunity to drive it as a core part of their sustainability activities.’
Caroline Rees, President and Co-founder of Shift commented that: ‘A living wage is a fundamental human right. Organisations’ responsibility under international standards to respect human rights means paying workers in their own organisation adequately and using their purchasing practices and business relationships to advance living wages also for workers in their value chains. Change doesn’t happen overnight, but Chief financial officers can and should drive demonstrable progress on this crucial issue.’
Richard Karmel, Managing Partner – London, Forvis Mazars, explained that: ‘Organisations face significant transitions as their business models seek to become more sustainable. The inability to pay a living wage throughout a value chain, including in one’s own organisation, can only bring into question whether that business model is sustainable. Now is the time to critically appraise the viability of these business models and to make tough choices with a human capital focus.’
The report urges finance professionals to bring living wages to board-level discussions, integrate them into sustainability strategies, and encourage their value chain, starting with Tier 1 suppliers, to pay living wages.
Regulatory frameworks, such as the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Due Diligence Directive (CSDDD), are increasingly emphasising the importance of living wages and the ability of organisations to be able to assess and report to an expected level of assurance across their value chain upon this imperative is fundamental.
