KUALA LUMPUR: Finance and accountancy professionals must confront wage inequality and take a leading role in promoting sustainable business practices, according to a report published by ACCA Global, Shift, and Forvis Mazars.
Titled “A Living Wage – Crucial for Sustainability,” the report warns that without immediate action, wage gaps will continue to undermine economic and social structures globally, including in the Asia-Pacific (Apac) region.
Based on insights from over 1,000 survey participants across 93 countries, along with discussions involving more than 50 finance and business professionals, the report provides compelling evidence of the socio-economic multiplier effect of paying living wages.
It emphasises that compensating workers below a living wage hinders the preservation and development of human capital.
“Business and investor initiatives involving leaders from across all regions increasingly highlight the importance of paying living wages to mitigate inequalities and related risks to societies, economies and financial systems.
“Yet, only 33% of Malaysia-based respondents felt this responsibility extended to their first-tier suppliers, and even fewer beyond that,” the report noted.
Additionally, the report underscores the undeniable link between living wages and sustainability, with 87% of Malaysia-based survey respondents acknowledging this connection.
Living wages reduce inequality, enhance economic stability, bolster business resilience, support human rights, strengthen supply chains and respond to increasing regulatory and investor demands for socially responsible practices.
From a Malaysian perspective, addressing wage disparities is particularly vital given the nation’s commitment to reducing inequality under the Madani economic framework.
This framework seeks to elevate Malaysia’s dignity and status by focusing on two primary objectives: restructuring the economy to establish Malaysia as a leader among Asian economies and ensuring that the resulting wealth is equitably shared by the rakyat.
By advocating for living wages, finance professionals in Malaysia can align business practices with national development goals.
The report urges finance professionals to elevate discussions around living wages to the board level, integrate them into sustainability strategies, and lead by example within their value chains, starting with Tier 1 suppliers.
Regulatory frameworks such as the European Sustainability Reporting Standards and the Corporate Sustainability Due Diligence Directive, increasingly emphasise the importance of living wages.
“Finance professionals in the Apac region including Malaysia must prepare to meet these growing demands for socially responsible practices, ensuring their organisations are well-positioned for future regulatory requirements,” the report stated.
ACCA Global CEO Helen Brand OBE remarked that accountancy and finance professionals are held to the highest ethical standards.
She asserted that the right of all employees and contractors to a living wage is an ethical responsibility, providing finance professionals with a unique opportunity to make this a core part of their sustainability efforts.
Shift president and co-founder Caroline Rees emphasised that a living wage is a fundamental human right.
She noted that organisations’ responsibilities under international standards to respect human rights necessitate adequate compensation for workers within their own organisations, as well as leveraging their purchasing practices and business relationships to promote living wages throughout their value chains.
Meanwhile, Forvis Mazars managing partner (London) Richard Karmel highlighted that organisations face significant transitions as their business models evolve toward sustainability.
He said the inability to pay a living wage throughout a value chain, including within one’s own organisation, calls into question the sustainability of that business model. – Bernama
