ShareAction targets financial sector to disclose ethnicity pay gap data

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ShareAction has launched a campaign to lift the standard for ethnicity pay gap reporting in the FTSE100, targetting in its first year financial services companies, before expanding to other sectors, to raise awareness of and help address racial inequality across workforces.

Currently, none of the financial sector companies in the FTSE100 report ethnicity pay gap data in accordance with the Office for National Statistics recommendation.

The campaign calls on:

companies with no procedures in place for ethnicity pay gap reporting to begin making disclosures;
those presently reporting are encouraged to improve the standard of their disclosures and undertake analysis of disparities to identify their causes, and solutions to address them.

To date, ShareAction has asked 16 questions at company annual general meetings (AGMs) over proxy season on this issue. All companies have welcomed the questions, with three – abrdn, Hiscox and Schroders – committing to publish their ethnicity pay data once their disclosure rate has increased.

All but one has agreed to follow-up meetings.

Recent reports show a vast discrepancy in pay between ethnic minorities and white British workers. For instance, in the UK, BME (Black Minority and Ethnic) young adults are 47% more likely to be employed on a zero-hour contract than white young adults.

COVID-19 has worsened existing inequalities; the unemployment rate for BME workers is over twice as high than that of white workers, with the gap widening.

Whilst gender pay gap reporting – a metric designed to reflect gender inequality across the workforce – has been mandatory for companies with over 250 employees since 2017, no such condition exists to monitor pay disparity for workers of different ethnicities.

Catherine Howarth, chief executive officer of ShareAction, said: “Companies across the economy have begun reporting their ethnicity pay data as they understand both the moral and economic imperative to do so. However, so far, this is still a tiny fraction of FTSE100 companies. We want to change that, and fast. Ethnicity pay gap disclosures are a critical step towards tackling inequality in the workplace. We recognise that capturing and reporting ethnicity pay gap data is a more complex exercise than for gender. We also know that solutions are available so long as employers are committed to action and change.”