Cost-of-living engagement

8 August 2023

At CCLA, we have always believed that healthy communities underpin healthy markets. The returns we generate from our investment portfolios will only be as robust as the people and planet that support them. We also believe that it is an employer's duty to protect the health, safety and welfare of their employees: physical welfare, mental welfare and, crucially, financial welfare.

What is the cost-of-living crisis?

The cost of living is the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare. In a period, such as now, where inflation of goods and services outstrips wage inflation, low-income households tend to bear a disproportionate burden; these households typically spend a larger proportion of their income on fuel and food.

According to the Living Wage Foundation Life on Low Pay report, there are currently an estimated 4.8 million workers earning a wage below the cost of living in the UK. While the government has a key role to play in supporting individuals through this time, there is a role for employers too.

The role of employers

Financial stress among employees can impede workplace performance, causing increased absenteeism, lost productivity and higher health care costs. According to the Society for Human Resource Management, financially stressed employees miss twice as many working days each year compared to their unstressed colleagues.

Employers can intervene in several ways. First, they can ensure base wages match the Living Wage. In addition, they can survey the needs of their workforce, provide vouchers to help employees buy food, bring forward or increase one-off bonuses, offer hardship funds or public transport discounts, train managers to look out for vulnerable colleagues, and help employees to access financial training.

CCLA as a catalyst for change

In the Autumn of 2022, CCLA and the Church Investors Group wrote to the 100 largest publicly listed employers listed on the UK stock market, asking for details of what they are doing to support their workers through the cost-of-living crisis. Specifically:

  • Whether they had taken, or plan to take, any steps to support their lowest paid employees.
  • Proportion of their workforce impacted by these activities and how were they selected for assistance.
  • Whether third party contracted staff (such as cleaners, caterers and security guards) had been eligible for assistance.
  • If they have no plans, why not?

To date, we have had 65 responses, of which seven are holding replies.

To support the engagement, we also have spent the past few months building support for a Cost-of-Living Investor Statement, which today has the support of 17 institutional investors, with a combined £3.2 trillion in assets under management.

Living Wage engagement

In early 2023, we commenced engagement with four UK-listed investee companies, asking them to become Living Wage accredited. We chose companies in sectors where there is a high proportion of low paid workers – namely hospitality and retail – as well as businesses with large UK call centres.

We are delighted to report that Admiral Group has since become an accredited Living Wage employer, and that a second company has indicated that it is seeking accreditation.

Proxy voting position

Our voting guidelines are reviewed and updated every year. We aim to be nimble in our approach and seek to step in where we believe corporate practice may be unjust or detrimental to shareholder value.

To support our cost-of-living programme, we updated our voting guidelines in 2023 and will no longer approve remuneration-related proposals where a company’s response to our cost-of-living engagement is considered poor. In Q2 2023, this resulted in CCLA withholding its support for the remuneration reports of ten companies.

This supplements our existing remuneration-related guidelines, which include voting against remuneration reports where the company is not an accredited Living Wage employer. Please see Voting Guidelines 2023 for details.


Since we initiated our cost-of-living programme in 2022, headline inflation in the UK has happily started to come down. However, at 7.3% in June 2023, the cost of living continues to rise, and inflation-adjusted average pay continues to fall.1 We remain committed to this engagement programme and look forward to reporting on further progress in the months to come.