This aspect includes social responsibility and progress with this agenda can be made by ensuring those in scope who work at the fund’s properties receive ‘a living wage’ rather than a basic minimum wage. The living wage goes beyond providing a subsistence living providing an appropriate wage to remove reliance on government benefits. This additionally promotes wellbeing and health for them and any dependants and in turn is seen to promote productivity and loyalty for an enlightened employer.
The BMO UK Property Fund has received accreditation from the Living Wage Foundation as a Living Wage Employer. The fund ensures that employees of all third-party contractors in scope are paid the real living wage of £10.20 in London and £8.75 across the rest of the UK. The fund is the first to achieve such accreditation at the fund level – a level which will arguably see the most positive changes as it impacts those who are traditionally underpaid, such as cleaners and security staff.
The fund has achieved this accreditation through a process of reviewing all contracts and where appropriate intervention with the contractor to ensure its employees receive a pay rise to meet the living wage threshold. This has had no impact on the fund costs. At fund level the average increase in the service charge, paid for by the occupiers, was 0.25% (based on two of nine managed properties where contracts were altered).
As ever we continue to try and go further and where the fund cannot influence contracts, as in its single let assets where the occupiers control the contracts, we are developing a new lease clause which will be rolled out proposing they consider becoming a living wage employer.
This social impact is an advancement to the fund’s responsible property investing activities, which have included procuring 100% of energy from renewable sources for its directly-managed properties.