Why Living Wages Matter to This Dutch Impact Investor?

Invest International is an impact investor that supports Dutch businesses and partner governments with financing for projects in foreign markets. The goal: sustainable economic growth and positive social and environmental impact — including commitments to pay Living Wages.

“We wanted to make sure the jobs we support are not just jobs, but decent jobs,” says Rogier Eijkens, Coordinator of Impact Measurement and Monitoring and Evaluation at Invest International. Here’s their story: 

The Origin Story

How did Invest International arrive at the decision to commit to Living Wages?

As a relatively young organization—about three and a half years old—we had to design our strategy from the ground up. Being an impact investor, funded largely by the Dutch Ministry of Finance, we wanted to ensure that we generate not just financial returns but also non-financial impact. When defining our impact strategy, we decided to align with the Sustainable Development Goals (SDGs) as an international guide. We selected SDG 8 (Decent Work and Economic Growth) and SDG 13 (Climate Action) as one of our key focus areas.

For SDG 8, we wanted to make sure that the jobs we support through our financing are not just jobs but decent jobs. This includes working conditions, workplace safety, and remuneration. On the remuneration side, we drew on previous experience from our team, some of whom had worked on Living Wages. That experience informed our conclusion that Living Wage is a meaningful and practical KPI to monitor. So, Living Wage became one of the core targets within our SDG 8 impact framework.

Additionally, we inherited a program—the SME and Startup Program—from a merger involving parts of FMO (Dutch Development Bank) and RVO (the Dutch Enterprise Agency). This program had already been working with Living Wage estimates before Invest International even existed. That prior experience further reinforced our decision to scale the Living Wage KPI across all our business portfolios, including but not limited to large corporations and government to government collaboration for public infrastructure projects. 

Why did you choose WageIndicator for Living Wage data instead of another provider?

When we explored available options, WageIndicator stood out due to the quality and comprehensiveness of their database. Since we operate in over 70 countries, including some rural settings, having consistent and reliable data across such a wide geographical scope is crucial for us. WageIndicator offers detailed datasets and rules for many countries, which aligns well with our needs. 

The Process

What do these Living Wage commitments look like from the company side? Are there timeframes they are supposed to fulfill? 

In essence, all our clients are encouraged to demonstrate their best efforts towards achieving Living Wages standards and to develop actionable roadmaps where gaps exist.

It’s important to emphasize that it’s not a strict compliance requirement. We cannot legally oblige clients to achieve Living Wages, but we do expect serious commitment. That means we expect them to take concrete steps towards paying a Living Wage to their direct employees.

To operationalize this, we include environmental social action planning our contracts, where we request the company to close a Living Wage gap in case this exists. A roadmap is then discussed and agreed upon with us. Typically, the roadmaps we see aim for a 2 to 5-year horizon. Five years is in most cases the maximum time we allow for closing the Living Wage gap.

Who calculates the Living Wage gap, and how does that process work?

When we receive a proposal, we organize a team—what we call a “deal team”—which includes both an ESG expert and an impact expert. So, two different people are involved from the start.

Our investment process has two formal phases, with two separate committees that need to approve the financing. Generally, during the due diligence phase, we ask the company to provide an anonymized salary table—ensuring compliance with GDPR privacy regulations—so that we can see the salary levels. We then compare the lowest salaries within the company against Living Wage estimates using the WageIndicator Living Wage database for Standard Family. This assessment is typically conducted by the ESG officer. After this analysis, we provide feedback to the client, pointing out whether there is a Living Wage gap and then initiate a discussion with the company on how to address when this is the case.

Before the final approval, we draft an Environmental and Social Action Plan, which becomes part of the contractual agreement.This action plan includes several items depending on the specific project, but closing Living Wage gaps is a standard item when applicable. We agree on a roadmap for closing the gap, usually with a defined time frame that we monitor annually.

Do you compare July 2025 salaries with the Living Wage figures from the same year or the previous year?

We compare it to the Living Wages Guidance numbers from the year before. 

Are bonuses, allowances and in-kind included while checking for Living Wage gaps?

We exclude overtime pay but include fixed bonuses and employer-provided housing when calculating the total wage.

Living wage assessments typically focus on full-time employment. How do you handle situations where employees work part-time or just a few hours?

That’s a crucial point. In our assessments, we ensure that Living Wage calculations are adjusted to actual hours worked. For part-time or seasonal workers, we look at the pro-rata wage to ensure that, on an hourly basis, it meets or exceeds the Living Wage estimate provided by WageIndicator. The core principle remains that for every hour worked, the worker should receive a fair share of the Living Wage equivalent. 

The Challenges

What if inflation or other shocks raise Living Wage levels again after the gap is closed? How do you handle that?

That’s a very relevant issue, especially now with the economic volatility we’re seeing. In such cases, we rely on continuous monitoring using external reference databases—like WageIndicator—to assess updated Living Wage estimates.

During our due diligence and ongoing engagement on an annual basis with clients, we check whether their lowest remuneration still aligns with the current Living Wage estimates. If a spike occurs, it triggers a reassessment. The goal is not to penalize companies for sudden economic shocks but to ensure they maintain a credible commitment and plan for recalibrating their wages accordingly.

What challenges do you face when trying to secure Living Wage commitments in government-led public infrastructure projects?

Public infrastructure projects—such as hospitals and bridges—pose significant challenges. These projects are often initiated by governments and involve co-financing with entities like the Asian Development Bank or World Bank. Our leverage in these cases is limited, especially when the implementing party is a government agency.

One approach we use is engaging directly with the contractors. When these contractors are Dutch companies, we have more leverage to discuss and agree on Living Wage commitments. However, if the implementation is largely in government hands, it becomes difficult to enforce Living Wage requirements.

What about larger companies, is the resistance more?

Larger companies often face more challenges when addressing Living Wage commitments compared to SMEs and startups. When encountering the Living Wage topic for the first time, there can be initial resistance or hesitation. While this is not always the case, it often requires more time, discussion, and negotiation to reach an agreement. In such cases, we work collaboratively with these companies to develop a clear roadmap and timeline towards paying Living Wages, ensuring a structured approach that aligns with their operational realities. Importantly, we maintain strict monitoring practices to ensure that these commitments are upheld.

Monitoring & Impact

How many of your projects are actually committed to Living Wages?

In the SME and Startup Program, commitment to Living Wages is at 100%. However, across Invest International’s total portfolio, as of 2024, about 68% of all new projects have made a formal commitment to Living Wages so far. Commitment here means they have agreed to work towards closing the Living Wage gap based on a mutually agreed roadmap. We work with close to 300 Dutch companies at the moment. 

This also means that 32% of projects are still uncommitted—either because the clients are unwilling to commit or because we lack sufficient leverage in those projects to enforce such a commitment. We have made significant progress in a short amount of time but there’s still a long way to go. 

Do you see business performance improvements in companies that implement Living Wages?

While I can’t provide direct evidence through financial metrics like revenue or profit margins, qualitative observations indicate that companies adopting Living Wage standards, alongside decent working conditions, tend to be better organized. There’s typically lower staff turnover and stronger operational stability. Particularly in the SME and startup segment, we observe that businesses practicing decent work principles—including Living Wages—tend to function better overall.

The Way Forward

How are you viewing the latest Omnibus negotiations and the prospect of a diluted CSRD and CSDDD mandates?

We had already started working on the CSRD reporting requirements internally. We established a project group within our organization to prepare for it. I don’t recall exactly which year we became obliged to report, but we initiated preparations last year. Then, the Omnibus Directive came into effect, which led us to revisit our approach and have discussions with our management team. There was some debate about whether we should proceed voluntarily with CSRD reporting since we already have much of the necessary information and are reporting on several topics. However, the latest decision is that we will now comply with the Voluntary Standards for Micro and Small Enterprises (VSME). This is what we are currently preparing for and will use for our disclosures and reporting. While there’s some overlap with CSRD, we are not actively following the CSRD framework at this moment. 

How do you address Living Wages within your supply chain?

For us, the primary focus is on the direct, supported employees of our clients. While Living Wages for the broader supply chain are a topic we encourage and discuss, we don’t monitor it. We ask our clients how they select their suppliers and whether they include responsible practices—such as codes of conduct—in their procurement processes. However, detailed supply chain monitoring on Living Wages is a challenging task and not something we require from our clients. It’s always a balance: as an impact investor, we want to encourage good ESG practices, including Living Wages, but we also recognize the operational realities of our clients.

August 2025