A coalition of more than 100 institutional investors managing over $12 trillion of assets is putting its muscle behind a demand that companies disclose more information on how they manage their global workforce.
The investor group features institutions in 11 countries including Schroders, UBS, Amundi, HSBC Asset Management, Axa Investment Managers, Legal and General IM, Nordea, Rockefeller & Co, and AustralianSuper. Coordinated by ShareAction’s Workforce Disclosure Initiative (WDI), the investor signatories are backing a survey sent to 500 global companies from 11 sectors, asking for improved data on issues such as diversity, workers’ rights, and health and safety in supply chains.
The request for information covers both developed and developing economies where companies have operations and supply chains. After a successful pilot year, the WDI is scaling up and approaching 500 companies headquartered in 30 countries, including Canada, India, Japan and the US. Companies include Apple, Alibaba, BAE, Tesla, and Louis Vuitton and are selected based on their market capitalisation, significance within their sector, and size of their workforce. They have received an invitation letter from the WDI coalition and a deadline for response of 22 October 2018.
Companies that participated in the first year of the Workforce Disclosure Initiative included Anglo American, Compass Group, GSK, International Consolidated Airlines Group (owner of British Airways), Microsoft, Sainsbury’s, and Saint Gobain. Disclosing companies employ nearly 3.5 million people, with millions more working in their supply chains. Investors will pay close attention to working with companies which encounter barriers to disclosure.
The WDI was launched in response to investor concerns that the quality of data from companies about workforce management is both weak and inconsistent between comparable firms. The data generated will allow investors to understand and engage with companies in support of smart management of ‘human capital’, as well as about their exposure to the risks of poor workforce practices.
The WDI’s ultimate goal is 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’.
Matt Christensen, Global Head of Responsible Investment, AXA IM, says: “As a long-term investor looking to provide our clients with a tailored offering while creating positive impact on society, we very much welcome the WDI initiative to better integrate the S in our investment case. As companies have been reinforcing their disclosures on environmental topics over recent years, we wish to see a similar effort with social factors. Companies should disclose data that is material, consistent and comparable enough to truly understand their approach to workforce management in their annual reports.”
Liza McDonald, Head of Responsible Investment, First State Super, says: “We believe integrating ESG issues into our investment process will lead to favourable long-term outcomes for our members. By collaborating with other investors through the WDI we want to encourage companies, both in Australia and further afield, to improve their reporting on workforce and supply chain related topics”.
Vaidehee Sachdev, Senior Research Officer at ShareAction, which coordinates the initiative, says: “From the pilot year of the WDI, we learned that, while there appears to be a promising step change in the way companies and investors are now approaching labour standards, there is a long road ahead to get to the level of transparency we need for decent work everywhere. Based on the quality of data collected and currently being reported, companies need to move away from only reporting on their policy intentions and good news stories. Investors and civil society want to see evidence that companies are proactively improving workforce practices for the betterment of business, workers and wider society.”
To minimise the reporting burden of multiple surveys and data requests from different investors, the WDI process offers a single survey for listed companies to disclose information to this major investor grouping. It is a streamlined solution to provide clarity and avoid duplication of effort by both companies and investors.
Notes to editors:
• For a full list of companies, and the survey and investor letter they received, please contact Beau O’Sullivan at email@example.com or +44203 475 7859
• To see the results of the pilot year, click here.
• ShareAction is a campaigning organisation with a mission to turn the investment system into one that truly serves savers, communities, and protects our environment for the long term.
• The Workforce Disclosure Initiative is coordinated by ShareAction in partnership with Oxfam, RIAA and SHARE, with input from Lake Advisory. Oxfam provides case study insight on key issues affecting workers in different countries and supports on analysis and engagement on supply chain practices. SHARE, the Shareholder Association for Research and Education, leads on investor coordination and company engagement in Canada. RIAA, the Responsible Investment Association Australasia, has joined the project in 2018 to lead on company and investor engagement in Australia.