A coalition of institutional investors with combined assets of more than $14 trillion is renewing its demand for companies across the world to come forward with better data on their staff and supply chain workers, with the aim improving the quality of jobs globally.
Investor signatories to the Workforce Disclosure Initiative (WDI), coordinated by ShareAction, include Amundi, Legal and General IM, APG, Rockefeller & Co, Schroders, AMP Capital, PKA Denmark, BMO Global Asset Management and First State Super. The signatories are supporting a survey asking 750 major international companies to disclose more standardised data on topics including health and safety, workers’ rights, diversity and wage levels.
These investors have already secured disclosures from many of the world’s largest listed firms, including MasterCard, Nestlé, BHP, Toyota, HSBC, Adidas and AT&T. Disclosers to the WDI in 2018 employ over 8 million people, with millions more working in their supply chains. Many investors have drawn on WDI data to inform their company engagement, while some have started to incorporate data into stock analysis.
Elly Irving, Head of Engagement at Schroders, says: “As a long-term investor we are trying to influence our investee companies to adopt more sustainable business practices. We’re making progress on a range of issues from climate change to cyber security, but still have little transparency on workforce issues. WDI is a valuable tool to help us improve our understanding of workforce risks and engage with companies to adopt emerging best practice.”
Companies approached this year include Samsung, Walmart, Novartis, Rio Tinto, Coca Cola, Royal Bank of Canada, BP and Siemens. Companies are selected based on their market capitalisation, significance within their sector, and size of their workforce.
The WDI launched in 2017 in response to investor concerns that the quality of data from companies about workforce management is poor and inconsistent. Increasingly, investors and companies recognise the business benefits of good workforce management.
Nicole Bradford, Portfolio Head, Responsible Investment at Cbus Super, says: “The work undertaken by the WDI makes it clear why investors are focusing on social risks. We hope the WDI will increase companies’ focus on identifying and remedying human rights issues in their direct operations and supply chains. Companies who do this well are likely to maintain their licence to operate, be an employer of choice and be more sustainable over the long term, thereby delivering better returns for our members.”
In the long run, the WDI aims to improve the quality of jobs in the operations and supply chains of multinational companies, which would contribute towards poverty alleviation and the delivery of Sustainable Development Goal 8 – ‘decent work for all’.
Vaidehee Sachdev, Senior Research Manager for the WDI at ShareAction, says: “Inequality is one of the biggest challenges of our time - improving the quality of jobs is central to tackling this. However, many companies do not demonstrate how they are providing good working conditions for those making and selling the goods and services that we all rely on in our daily lives. From direct employees, to contract workers right down the supply chain, there are still too many cases of poor quality jobs. There is now huge support by investors around the world to push companies to be more transparent on how they’re protecting and promoting the workforce. We think it’s time companies were far more open about how the jobs they provide deliver real benefits to the lives of workers and the communities on which their businesses depend.”
Shannon Rohan, Director of Responsible Investment Leadership at SHARE, says: “Compared to Europe, very few North American companies are disclosing data on their workforce. However, with the participation of large corporations including Microsoft and Canadian National Railway in last year’s survey, and growing interest in human capital management by North American investors including State Street Global Advisors and BlackRock, we expect that in 2019 other listed firms will see the WDI as a helpful tool for increasing long term investor value while building a sustainable, inclusive and productive economy.”
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