Major corporations are failing to meet investor demands to prove they have oversight over their most vulnerable workers, at a time when the Covid crisis is threatening health, safety, and livelihoods of employees. With estimates that up to 195 million jobs could be lost as a result of the virus in the coming year, the fair treatment of workers has never been more important.
Coordinated by ShareAction, the Workforce Disclosure Initiative, which has been backed by 130 investors with over $14 trillion, asks companies for information on topics including health and safety and labour rights for all types of worker– both in direct operations and in supply chains internationally.
Investors making the request include Amundi, Aberdeen Standard, PKA Denmark, Achmea, Vision Super, Candriam and Nest. The aim is to make workforces more sustainable in the long term.
However, 85 per cent of companies approached neglected to respond to these requests, offering little comfort that they are responsibly managing the fallout of the coronavirus pandemic on insecure workers with pre-existing policies and practices.
Companies generally have in place policies on responsible sourcing of staff and supply chain workers’ rights, but, surprisingly, only 55 per cent could provide evidence of acting on their commitment to respect supply chain workers’ rights. This is concerning since many workers in global supply chains could face income or job loss as a result of the pandemic.
Only by first having full oversight of workforce governance structures, supply chains, and health and safety can companies fully account for and protect their labour force. This also allows investors to push for improvements in their policies and practices.
The WDI welcomed submissions from 118 companies from 17 countries in 2019, including first time submissions from South Africa, Brazil and Russia. Submissions covered 10 million people employed in companies’ direct operations and many more in supply chains.
Big household names like Microsoft, Unilever, Nestlé and GSK reported to the survey for the third consecutive year. Yet, some of the biggest players like Amazon, Apple, BP, Carnival, the cruise ship group, and Fresnillo, the mining company, are yet to be forthcoming with information.
Of those companies that did complete the survey, they disclosed only 40 per cent of what was asked. Still, this is better than the 17 per cent of key data that companies typically publish in existing reports.
The WDI also found:
- Companies are more willing to come forward with information on their permanent employees than for their contingent workforce, many of whom could have no access to sick leave or medical benefits, highlighting the vulnerability of insecure workers. Only 25% of companies disclosed how many contingent workers they employ,
- Companies do not appear to be collecting data relating to collective bargaining and union membership, undermining their ability to soothe labour relations which could be fraught at this time.
Simon Rawson, Director of Corporate Engagement at ShareAction says: “The Covid crisis has really exposed which companies do well by their workers and which are failing to safeguard them in times of need. Investors should be asking tough questions. It is essential that companies have good oversight of their workers, especially the most vulnerable. Meaningful transparency on workers can help protect them when crisis strikes. Our findings show that this data collection and reporting is not a priority for many of the world’s biggest companies. This needs to change.”
Rachel Elwell, CEO, at Border to Coast Pensions Partnership, says: “As long-term strategic investors, effective transparency and disclosure is essential to our investment approach – and WDI is a key component in understanding how firms are treating what they normally cite as their most important resource – their people. More than ever, Covid-19 highlights the need for firms to take a balanced approach that will ensure long-term sustainability and performance. WDI enables investors to engage with management, and assess firm potential, on a consistent basis; and this improved insight gives greater understanding and confidence in how the firm is run, making them a more attractive long-term investment.”
Patrick O’Hara, Senior Responsible Investment Analyst at USS, says: “In these difficult times, it is even more important for long term investors to understand how investee companies manage and interact with their employees. This understanding needs to extend to how policies are implemented throughout the supply chain. WDI helps to shine a light on this important area by encouraging greater corporate disclosure; disclosure which can help inform engagement and voting decisions and thus aid responsible long-term stewardship.”
A spokesperson from Toyota Motor Corporation says “Our collaboration with ShareAction through the WDI has been a great way to understand stakeholder expectations. For Toyota, the WDI isn’t just about filling out a questionnaire. It offers us valuable insights and benchmarking so that we can continuously improve our sustainability related processes, and better contribute to our investors, customers, employees, and global society.”
Notes to editor:
- For more information, please contact Beau O’Sullivan at firstname.lastname@example.org or +447950 299 491
- See the full analysis report here, including the 118 companies that took part.
- The WDI 2019 survey was open from June to November 2019.
- The full list of WDI investor signatories can be found here.
- ShareAction is a campaigning organisation pushing the global investment system to take responsibility for its impacts on people and planet, and use its power to create a green, fair, and healthy society. We want a future where all finance powers social progress. For 15 years, ShareAction has driven responsibility into the heart of mainstream investment through research, campaigning, policy advocacy and public mobilisation. Using our tools and expertise, we influence major investors and the companies they invest in to improve labour standards, tackle the climate crisis and address inequality and public health issues.
- Established in 2016, the Workforce Disclosure Initiative calls for greater transparency on workforce policies and practices in companies’ direct operations and supply chains. Using the influence of 130 investor signatories with over $14 trillion assets under management, the WDI encourages publicly listed companies to complete a comprehensive annual survey which covers freedom of association, human rights due diligence, diversity, pay ratios and more.
- The WDI was funded by UK aid from the UK government, as part of the Department for International Development’s Responsible and Transparent Enterprise programme which closed at the end of March 2020.