TSC Announces Living Wage Guardrail

Poverty wages don’t just undermine workers: inequality perpetuated by low pay at companies such as Walgreens Boots Alliance (NYSE: WBA) threatens the national and global economies with losses that will burden investment portfolios for years to come. Closing the living wage gap worldwide could generate significant increases in the well-being of workers, leading to a more than 4% increase in global GDP.

We’re working with institutional investors and UK-based ShareAction to insist that companies implement pay practices throughout the value chain that create—rather than extract—value. We do this by means of a “guardrail”: a minimum set of parameters within which companies must operate to protect the social, environmental, and economic systems that support diversified portfolios. Investors enforce guardrails via proxy votes and other stewardship prerogatives.

In this case, the guardrail asks that companies not only pay a living wage to their employees, but also ensure the same from their contractors and sub-contractors.

The first opportunity to support the living wage guardrail is fast approaching. We have filed a shareholder proposal at Walgreens seeking the following:

BE IT RESOLVED, shareholders ask that the board and management exercise their discretion to establish Company wage policies that are reasonably designed to provide workers with the minimum earnings necessary to meet a family’s basic needs, such policies to include reference to established living wage frameworks and timeframes for adoption and to comply with relevant legal obligations.

The living wage guardrail campaign will be brought to multiple companies in the 2024 proxy season and will address the reality that while poverty wages can increase profits at individual companies, they externalize costs that burden investors’ diversified portfolios.

Our new case study—“Living Wage and the Engagement Gap”—establishes the relationship between poverty wages and long-term diversified portfolio returns and the imperative for investors to act. Living Wage for US Employer certification could serve as a clear demonstration that U.S. companies are adhering to the guardrail, while Living Wage Foundation accreditation fulfills the same role in the United Kingdom. Organizations such as IDH Sustainable Trade Initiative and The Living Wage Network promulgate related frameworks.

We expect Walgreens to publish its proxy statement this week, and to hold its annual meeting on or around January 25, 2024. To stay informed about this and other key votes for system stewards, subscribe to our supplemental digest for proxy season 2024.