This webcast provided more background on the methodology updates and results on the topic of Living Wage. This new criterion, added to the Future Questions section, explores whether companies have developed a methodology to assess the wage level of their own employees, contractors, suppliers and franchisees. The Living Wage criterion was introduced by SAM in order to collect unique data on the topic and also to raise awareness among companies.

The overall results show that it is not yet a mature topic: of the 217 companies that were asked to respond to the Living Wage Methodology question, 37 actively responded to the question (17%) and only 17 met SAM’s requirements (8%). This is why in the 2020 CSA, the Living Wage questions will remain part of the Future Questions section. SAM is taking the time to understand how companies answer these questions before adding it into the core questionnaire.

Making steps towards a living wage

Over time, it has become apparent that the minimum wage set by governments in many countries does not suffice in covering a family’s basic needs. This is why companies are increasingly expected to be responsible for paying their employees in a fair way and rising the living standards of employees and their families.

More recently, investors are also looking more closely at living wage given that it is a key topic in the UN’s Guiding Principles on Business and Human Rights. In addition, wage improvements also drive business benefits through:

• Value creation: strengthen human capital, upgrade skills, drive up quality and productivity
• Risk management: reputation with stakeholders, enhanced profile and compliance with code of conduct requirements
• Growth and resilience: securing future company development, access to markets through enhanced compliance and innovation and cohesion through enhanced motivation and equity  

Please find the highlighted developments and performance norms in more detail in the downloadable summary on top of the page.

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