Pay equity or fairness has become a central point of discussion in society – both before and during the current economic crisis. Rooted in a focus on gender equality, the discussion has now broadened to encompass other public debates, such as the role of racial origin or the comparably low income of people working in system-critical jobs.
In parallel, European governments have increased pressure on businesses, introducing additional legislation on disclosure and reporting of compensation differentials between employee groups as well as more robust reporting requirements for other non-financial indicators. E.g. the European Parliament and Council require all member states to implement “the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation” (Directive 2006/54/EC), which was adopted by the European Commission within the “Action Plan 2017-2019 Tackling the Gender Pay Gap” and which gave rise to various country-specific legislations.
Furthermore, increasingly sharp regulation is forcing more transparency on equal pay than most companies can currently offer. This, in turn, raises the profile of the issue among candidates, employees as well as shareholders. While employer branding and employee engagement are already embedded in corporate agendas, clear statements from institutional investors regarding equal pay are rather new. Among others, in 2018 BlackRock added to their en