The financial sector is falling behind in reporting their ethnicity pay gap, according to research from ShareAction, the responsible investment non governmental organisation.
It found that no FTSE 100 financial firms reported the data in line with the National Office of Statistics (ONS) recommendations while only one of the 16 companies lobbied during annual general meeting season, agreed to follow-up meetings.
Three – abrdn, Hiscox and Schroders – committed to publishing their ethnicity pay data once their disclosure rate has increased.
As a result , ShareAction has launched a campaign calling on companies – starting with financial services firms– to begin making disclosures, or to improve the standard of reporting for those already doing so.
A CIPD, the professional body for HR and people development, published a report in September last year that found just 13 of the UK’s top 100 listed companies had reported their ethnicity pay gap.
ShareAction has partnered with several minority-led groups, including the Runnymede Trust, #Ethnicitypaygapcampaign, Project Speak Up, reboot, CIPD, the professional body for HR and people development, the Living Wage Foundation and 30% Club – Race Equality Group to steer the campaign.
The organisation also intends to work with investors from its Good Work investor coalition with £3.8trn assets under management and advisory to support this campaign.
ShareAction CEO Catherine Howarth said there was “both the moral and economic imperative” to report on ethnicity pay gaps and it is a “critical step towards tackling inequality in the workplace”.
Recent reports show a vast discrepancy in pay between ethnic minorities and White British workers. For instance, in the UK, 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 also worsened existing inequalities in that the unemployment rate for Black, minority and young adults is over twice as high than that of white workers, with the gap widening.
While all agree that improvement is needed, opinions are divided over whether publishing pay gap reporting will lead to meaningful change.
reboot.’s recent Multicultural Britain Survey of almost 4,000 UK adults found only two in five (43%) white Britons said firms should publish data on ethnic diversity in their workforce, compared with 69% among ethnic minority respondents.
“Before we can start reporting on the ethnicity pay gap in a meaningful way, companies need to ensure they are supporting an inclusive culture where self ID is not met with scepticism and employees understand the benefits of supplying this information, ” said Noreen Biddle Shah, founder of reboot.
She adds, “More transparency on ethnicity data reporting will therefore mean companies will have to become more accountable – and this will help build a sustainable roadmap and keep race inequity high on the agenda.”