New York, NY.
Shift is delighted to announce that, in partnership with the Capitals Coalition, the organization will launch a 21-month initiative to develop an accounting model for living wages.
Since 2018, Shift has explored accounting methods as one of the six focus areas of Valuing Respect, a three-year research and co-creation project to develop better ways to evaluate business respect for human rights. As Rebecca Henderson of Harvard Business School writes in Reimagining Capitalism, “It turns out that reimagining capitalism requires reimagining accounting… even tiny changes in accounting rules can change behavior in profound ways.”
In an expert roundtable, hosted in June 2019 by the Institute of Chartered Accountants in England and Wales, participants agreed that focusing on living wages is a sound starting point to make meaningful progress towards reflecting the value of respect for human rights in accounting practices.
“An initial focus on living wages made sense, both because wages are relatively easy to measure, and – more significantly – because a living wage has catalytic power to open the door to the realization of many other human rights.”
Following the roundtable, Shift partnered with the Capitals Coalition in designing the new project. The aim is to develop an accounting model for companies to assess and disclose progress towards living wages in both their workforce and supply chains. The project will be based on broad and inclusive consultations with experts and stakeholders; and it will build on important work already done in the field, including respected methodologies for calculating living wages, which will provide an essential benchmark within any accounting model.
“This project is incredibly important for how companies understand the value created by people – social and human capital. By including a living wage in the accounts, we can address one of the biggest challenges of implementation – that it is seen purely as a cost, ignoring the fact that investing in living wages can generate a return for the individuals, the company and society.”
The project has already attracted high levels of interest from companies, investors and civil society organizations. It will be launched in January 2021.
To learn more about the project and for any other inquiries, please email communications [at] shiftproject [dot] org