Pension funds and asset managers are renewing pressure on Next over low pay, warning that paying the minimum wage to staff could pose reputational, financial and systemic risks for long-term investors.
Pension fund investors are among a shareholder coalition putting pressure on Next to reduce its reliance on minimum wage labour, while urging the UK-based retailer to review how it sets base pay, and increase wages to the real Living Wage.
Border to Coast Pension Partnership, Strathclyde Pension Fund, PIRC, BNP Paribas Asset Management, Achmea Investment Management and other investors said they would challenge the board over low pay at Next at its annual general meeting (AGM) held on 21 May, following last year’s shareholder resolution calling for greater action on wages.
The group, managing around $3trn (€2.5trn) in assets, is urging Next to build on recent improvements in pay transparency by reviewing how it sets base pay, with a view to lifting wages to the real Living Wage.
UK-based responsible investment charity ShareAction coordinated the investor campaign as part of its Good Work programme, which uses shareholder pressure to tackle income inequality and improve labour standards at listed companies.
Colin Baines, stewardship manager at Border to Coast Pension Partnership, said the £60bn local government pension pool was joining other shareholders in calling for action on low pay.
“Companies who pay a real Living Wage experience higher staff retention, reduced recruitment costs, and improved productivity, which directly benefit financial performance,” he said.
Baines added that, for long-term investors, low pay also posed portfolio-wide risks linked to inequality and in-work poverty.
Low and stagnant wages are leading workers to require government or charitable assistance to maintain basic living standards, Baines said.
He went on to stress it is a growing problem that has the potential to hit demand in important markets as well as company reputations and performance.
“As a long-term investor, we also believe that paying the real living wage helps to mitigate the portfolio and systemic risks presented by growing inequality and in-work poverty,” said Baines.
ShareAction support
Ruan Opie-Meres, senior campaign and research officer at ShareAction, said investors had made clear last year that they expected Next to treat low pay as a serious business issue.
“Progress on transparency matters, but it was never the end goal,” he said. “At a highly profitable retailer where 93% of staff are still paid the legal minimum while CEO Lord Wolfson is taking home £7.43 million, more than 240 times that of lower-paid workers, investors continue to ask questions about how sustainable this is.”
The escalation follows a 2025 ShareAction-coordinated resolution at Next, which secured 26.9% support. That resolution was backed by 102 individual and institutional investors, including AXA Investment Managers, Epworth Investment Management, Friends Provident Foundation, Greater Manchester Pension Fund, Scottish Widows and Trust for London.
