Companies define cost-of-living realities

The world is no longer weathering a temporary cost-of-living shock. A crisis that should have passed has instead calcified into a structural failure, as wages flatline and prices of everyday essentials keep climbing. Real wages remain below pre-pandemic levels in many countries, while food, housing, energy, water, and transport costs continue to outpace household incomes. Half of all wage workers in low-income countries earn less than USD 201 (PPP) a month — far below what is needed for a decent standard of living — and even median-income households in advanced economies are struggling to meet basic needs.

The world’s largest companies influence both sides of the cost-of-living equation: they determine what people earn and what people pay. Moreover, the scale of these companies means their decisions directly affect billions of people globally, as essential services become increasingly privatised and corporate supply chains expand.

Momentum across the multilateral system is calling for action on living wages. In 2024, the ILO reached a landmark tripartite agreement formally defining and establishing principles for living wages, a commitment that governments reaffirmed in the 2025 Doha Political Declaration, now moving into implementation. Leading standard-setters such as GRI and ISSB are signalling stronger emphasis on wage- and benefits-related expectations in future corporate disclosure. In tandem, WBA has launched a Collective Call to Action, now supported by over 65 signatories, inviting companies, governments and investors to embed living wage principles into practice.

Less than 5% of major companies report paying living wages

The overwhelming majority of the 2,000 companies across WBA’s assessments are shirking their responsibility for paying living wages or ensuring affordable essential services, exacerbating the cost-of-living crisis at both ends.

Among these 2,000 globally influential companies, which employ over 107 million workers, less than 5% disclose that they guarantee a living wage for their workforce, of which four out of five are headquartered in North America or Europe. The remaining 95% of companies do not disclose whether their workers earn enough to meet basic needs, leaving millions, particularly in low- and middle-income countries, without any clear assurance of sufficient earnings. Performance is even weaker in supply chains: less than 3% of companies support suppliers in paying living wages, despite influencing the incomes of more than half a billion workers through their supply chains globally.

That said, there are signs of progress. In the past year, 41 additional companies, including food company Kerry Group, footwear company Puma, and mining company Vale disclose achievement of or clear pathways towards living-wage coverage for all direct workers, while others like H&M, Hershey and Unilever have established pathways towards living wage payments in their supply chains. Despite this, many companies struggle to translate commitments into measurable progress or meet evolving wage standards.

Corporate action on affordability of basic services remains deficient

Corporate performance on affordability is also strikingly poor. Among the 300 companies affecting utilities, housing and transport, 76% score zero on every affordability indicator, from basic reporting to target-setting and implementation. This means that the companies people rely on for essential services neither disclose whether their services are affordable nor report any action to ease rising costs for households. The digital sector fares no better: only less than 8% of 200 digital companies have programmes that expand access to technology for vulnerable groups.

Affordability is not yet treated as material by most companies. However, promising practices are emerging. In the utilities sector, American Water Works, Iberdrola and United Utilities have embedded affordability measures into business planning and reporting, and are taking steps to support vulnerable households and reduce bill volatility. Yet only four utility companies disclose forward-looking affordability targets, leaving the majority of 3.6 billion energy customers and 800 million water customers with providers that show no definitive plans to improve affordability. Many top performers in the digital sector are headquartered in lower-income countries such as Kenya, Mexico, the Philippines and South Africa, offering opportunities to scale low-cost models and break traditional wealth patterns. Nonetheless, affordability continues to be one of the main barriers to digital inclusion globally.

The results are clear: companies still have a considerable distance to go to mitigate their worldwide impact on wages and affordability, while inequality and cost-of-living pressures continue to mount.

Clear accountability is the way forward

Companies can play a pivotal role in tackling the cost-of-living crisis by considering living wages and affordability as core responsibilities. Next to ensuring living wages for workers across their operations and supply chains, it is increasingly important that companies conduct affordability risk assessments, integrate affordability as a material sustainability topic and disclose relevant metrics.

At the same time, governments can bridge the gap between minimum wages and living wages through policies. By integrating wage standards into reporting requirements, policymakers can accelerate corporate transparency and action. Simultaneously, investors and other financial actors have can engage with companies to promote living wages and affordability as fundamental human rights and overcome long-term systemic issues.

Clear accountability frameworks are essential. Defining responsibilities for companies, governments, and investors is fundamental to ensure that affordability doesn’t slip through the cracks and land up ‘no one’s problem’. Creating clarity on everyone's responsibility sets the conditions for collective action that closes gaps in affordability and ensures that no one’s basic needs are overlooked.