Living Wage
Definition
A living wage is the minimum income necessary for a worker to meet their basic needs, including food, housing, healthcare, and education, in the location where they live. It typically exceeds statutory minimum wages and is calculated based on local cost-of-living data. Paying a living wage is increasingly seen as a marker of responsible business practice.
Why It Matters
Living wage commitments are gaining traction as a tangible social indicator within ESG assessments. Companies that ensure living wages across their supply chains demonstrate stronger social performance and reduced labour-related risks.
Related Terms
Just Transition
A just transition is the principle that the shift to a sustainable, low-carbon economy must be fair and inclusive, leaving no workers or communities behind. It involves planning for the social and economic impacts of decarbonisation, including retraining workers, supporting affected communities, and ensuring equitable access to new green economy opportunities. The concept originates from the labour movement.
Human Rights Due Diligence
Human rights due diligence (HRDD) is a process by which organisations identify, prevent, mitigate, and account for how they address their adverse human rights impacts. It involves assessing actual and potential human rights risks across operations and supply chains, taking appropriate action, and tracking effectiveness. The concept is rooted in the UN Guiding Principles on Business and Human Rights.
Ethical Supply Chain
An ethical supply chain is one in which all participants – from raw material suppliers to final distributors – operate in compliance with environmental, social, and governance standards. This includes fair labour practices, safe working conditions, environmental responsibility, and anti-corruption measures. Managing ethical supply chains requires ongoing due diligence, auditing, and supplier engagement.
Social Impact
Social impact refers to the significant positive or negative effects that an organisation's activities have on the well-being of communities and society at large. It encompasses outcomes related to health, education, employment, equity, and quality of life. Measuring social impact helps organisations understand and communicate their contribution to societal progress.