Metrics that Matter: Reporting on Fair Wages. A guide to navigating the complex pay fairness reporting and due diligence landscape relevant to the social aspects of ESG
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ABSTRACT
In a global environment with over 2,400 sustainability regulations and a multitude of ever-increasing pay fairness mandates, the environment that organisations are operating within is constantly changing. This landscape of pay fairness reporting is evolving rapidly, marked by the introduction of several landmark pieces of legislation focused on pay equity and transparency. From Gender and Ethnicity Pay Gap reporting to the comprehensive measures introduced under the EU Pay Transparency Directive, the trend towards enforcing pay transparency is unmistakable. With the recent green light given for the European Corporate Sustainability Due Diligence Directive (“EU CSDDD”) and the earlier accepted, and now in force, EU Corporate Sustainability Reporting Directive (“CSRD”), it is evident that businesses are going to have to determine their approach and strategy to navigate all requirements contained in the current, new and upcoming Environmental, Social and Governance (“ESG”) and due diligence legislation.
These regulations require companies to report on their progress, undertake due diligence and provide increased transparency across both their direct employees and also their (often complex) supply chains. Whilst we await the potential changes to the remit of reporting for CSRD and CSDD, which is delayed under the recent EU Omnibus Directive 2025 (“Omnibus”), the broader significance of pay fairness within the social agenda of global sustainability regulations continues to rise with an expanding array of disclosure and reporting requirements. Consequently, it is more important than ever for organisations to continuously adapt to ensure they are collecting and evaluating data which allows them to report on key metrics and meet ever-stringent transparency standards. At the same time, they must remain adaptable to changing regulatory requirements, with consideration to reporting in a way which articulates the underlying pay philosophy of the organisation with a view to attracting and retaining talent.
So, what lies ahead for organisations and how can they prepare now?