Share Action

ISSB urged to prioritise international standards for reporting on human and worker rights

ISSB pressed to design international reporting standards for human capital and human rights issues by investors including Scottish Widows, La Française Group, and Local Authority Pension Fund Forum (LAPFF)

(Tuesday 29th August) An investor coalition, managing assets of more than one trillion USD, including Impax Asset Management, The Universities Superannuation Scheme and Sycomore Asset Management is calling on the International Sustainability Standards Board to make human capital and human rights a priority for its next set of global reporting standards.

The letter, coordinated by responsible investment NGO ShareAction and signed by 24 investors across the globe, states investor demand for greater volumes of better-quality workforce data “is at an all-time high” and urges the ISSB to “to prioritise researching human capital and human rights disclosure standards in its upcoming two-year work plan”.

These investors span six countries and include a mix of asset managers and asset owners. They have co-written to the ISSB specifically in response to its Request for Information (RFI) – launched in May 2023 – seeking feedback on which area of sustainability to focus its next set of standards on.

James Coldwell, Head of the Workforce Disclosure Initiative (WDI) at ShareAction said:

“This is an opportunity for the ISSB to set the global reporting baseline needed for investors to be able to understand and take meaningful action on labour and human rights abuses.

“We know that workers around the world face exploitation by unscrupulous companies, harming the workers themselves and creating risks for investors. Tackling these issues can only be achieved when there is transparency around corporate practices - something the ISSB is perfectly positioned to deliver. This is why we're calling on them to prioritise research into human capital and human rights, to develop a globally accepted reporting framework.”

Crucially, the letter also calls on the ISSB to consider “how to disclose human capital and human rights information together” by addressing the relationships and connections between the two topics. It argues that in practice neither companies nor investors treat the two topics as totally separate areas.

Human rights due diligence processes, for example, are used as key tools for identifying labour issues. Concepts such as unionisation and modern slavery clearly belong to both categories.

This letter follows a recent ShareAction opinion poll commissioned to gauge the views of British Adults on how they felt about where their money was invested. The results showed an overwhelming majority (74 per cent) of people would have a more negative view of financial institutions that invest in companies which fail to meet human and labour rights standards.

Vincent Kaufmann, CEO of signatory Ethos Foundation, said: “COVID-19 – and the subsequent mass fluctuation it caused in the labour market – has emphasized just how critical human beings are to the long-term success of any business.

“Be it good people management within the workforce, or comprehensive human rights due diligence across the supply chain, an organisation which prioritizes human wellbeing stands the best chance of succeeding in the future.

“As the financial materiality of these issues becomes increasingly clear, it is crucial investors have access to comprehensive and comparable social data from businesses to help inform investment decisions. It is imperative the ISSB prioritises developing human capital and human rights standards as soon as possible to help deliver this.”

The WDI has also announced that it is launching an investor working group focused on global social data reporting, which will launch following the closure of the RFI on September 1st 2023.

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