Ethnicity pay gap reporting toolkit to launch in June

'Investor power can create change'

ShareAction is releasing a toolkit in June to help companies report their ethnicity pay gap.

In July last year, the NGO embarked on a campaign calling on companies – starting with financial services companies – to begin making disclosures, or to improve the standard of reporting for those already doing so, following a CIPD report the previous year that found just 13 of the UK’s top 100 listed companies had reported their ethnicity pay gap.

Updating ESG Clarity on the progress of this campaign, Kohinoor Choudhury (pictured), senior campaigns officer at ShareAction and lead on the campaign, said she was “really surprised” at how keen firms were on reporting.

The campaign asked questions at 17 AGMs, which led to engagement meetings with 12 of those companies.

“The main issue that seems to be around reporting is low self-disclosure rates,” Choudhury said. “They want to learn from each other so we arranged something to get everyone in the same room to talk to each other, which was facilitated by the Runnymede Trust [which is a partner on the campaign].”

Another issue is around disaggregating data. ShareAction found very few companies disaggregate to the five ONS categories. “But now it’s 18 ONS categories,” Choudhury said, “and no one is doing that.”

This year the campaign is expanding its focus to the hospitality, catering food processing and food manufacturing sectors, which the Runnymede Trust has identified as having disproportionately large numbers of minority workers on low wages and insecure contracts.

“We’ve already attended five AGMs and we’ve already had two follow-up meetings,” Choudhury said.

It will also launch a toolkit in June, focused on the holistic collection of data – which Choudhury hopes will improve self-disclosure – and giving examples of best practice, sharing case studies and providing actions for investors.

Investor action

Appetite for ethnicity pay gap reporting is coming in part from investors, Choudhury said, who can see the link between representation and performance. “Investors want their companies to be more diverse to spot opportunities that other companies won’t because they have a very homogenous workforce.”

She added there is also evidence younger generations want to work in more diverse and inclusive companies. “If companies want to attract and retain staff then they do need to show that they’re doing this work – it’s in the company’s interests, which means it’s in the investors interest.

“Investor power can create change,” she added, pointing to the group’s living wage campaign, which she claimed has led to an increase of £89m in the pay packets of 21,000 low-wage workers.

“If investors push companies to voluntarily report, it will show the government, which has been dragging its feet on mandating ethnicity pay gap reporting, that it can be done.”

Avatar

Natasha Turner

Natasha was global editor at ESG Clarity, part of Mark Allen Financial, and a financial journalist for seven years. She has been shortlisted for Story of the Year and Investment Journalist of the Year...