The UK’s top companies are failing to address in-work poverty, a report has warned, with the majority of FTSE 100 firms failing to mention the issue at all in their end-of-year reports.
Analysis of the end-of-year reports of the UK’s top 100 publicly listed companies, conducted by the Social Market Foundation (SMF), found that more than half (53 per cent) did not use the word ‘poverty’ at all.
Across all 100 firms’ documents, the word was used just 101 times: an average of just once per report. In comparison, the word ‘audit’ was used 23,601 times across the reports.
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James Kirkup, director at the SMF, said companies that ignore the ‘social’ aspect of environmental, social and corporate governance (ESG) goals were not making the most of their agendas, adding that neglecting the social aspect “could be very expensive indeed”.
“If companies are seen to promise to do good but won’t address something as fundamental as poverty among their workers, suppliers and neighbours, the public and those who invest their money will start to wonder if ESG really means anything and lose trust in business,” Kirdup said.
The analysis found that the word ‘governance’ was mentioned 176 times in the average FTSE 100 annual report, while the word ‘environment’ was mentioned 64 times.
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Catherine Sermon, campaign and content director at Business in the Community, said there was a “huge scope” to increase and improve corporate reporting on the social side of ESG.
But, she added, businesses needed to carefully prioritise their “most material social issues”. “In-work poverty is a shameful reality for too many employees in the UK, and there are strong business reasons for many companies to tackle this. But for some, the most challenging aspect of in-work poverty might exist globally in their supply chain” she said.
“Responsible business is not about addressing just one or two of these issues, it’s about businesses doing the right thing across the board,” said Sermon.
Separate research by the SMF found that the majority (97 per cent) of large employers in London said that ESG issues were “important” to their business, of which three in five (61 per cent) said that the environment was a focus of their ESG efforts.
Almost four in five (79 per cent) employers in the capital also agreed that poverty is an issue that impacts people in the capital, with 70 per cent saying they were prepared to take voluntary measures to tackle in-work poverty.
Of this group, nearly half (47 per cent) said that they were motivated to take action because “it is the right thing to do”.
The research also found that the public share this view, with two thirds (65 per cent) agreeing that “poor treatment of employees” was concerning business behaviour.
Manny Hothi, chief executive of Trust for London, said that businesses needed to take responsibility for in-work poverty: “We want to see all businesses in London taking action to tackle poverty, and a natural starting point is by becoming accredited as a Living Wage employer.”