More companies are disclosing an increasing amount of data on their treatment of workers, but the findings show that ‘decent work for all’ is a long way off.
(Wednesday 31 March, London) The Workforce Disclosure Initiative (WDI), the investment community’s leading gauge of corporate treatment of workers, has today published the findings of its annual survey and acknowledge high performers with a series of new awards for workforce transparency.
The findings, provided in full to a $7tn coalition of investors, paint a conflicting picture of corporate responsibility on issues such as pay, working conditions and diversity.
On one hand, disclosure is rapidly improving. 141 of the world’s largest listed companies disclosed to WDI in 2020, a 20% increase from the previous reporting cycle. Submissions came from 20 countries and every economic sector, representing over 12 million employees in companies’ direct operations and many more in supply chains.
Moreover, the WDI revealed that participating companies are disclosing more data than before, with respondents completing 61% of the survey on average, up from 40% in 2019.
But improvements in transparency do not necessarily reflect improved treatment of workers.
For example, 74% of companies gave the CEO to median worker pay ratio in 2020, compared to 48% in 2019. But higher levels of information did not equate to lower ratios: the ten companies with the highest pay ratios paid their CEO 200 times more than the median employee, while the top three companies all paid their CEOs over 500 times more than the median employee.
In the era of Black Lives Matter and #MeToo, more companies than ever (98%) are pledging to improve diversity in their labour force, but many lack the data necessary to implement these strategies. Only 75% could provide the gender breakdown of employees and just 36% reported the ethnic composition of their labour force.
Charlotte Lush, WDI Research Manager, said: “For plans and initiatives to work, a company needs to understand the composition of its workforce. Without this data, companies are effectively taking a shot in the dark, implementing practices without knowing who is in their workforce, and what it is that they need.”
Detail was also lacking on discrimination and harassment practices, where 96% of companies provided data on their policies, but only 41% could report the number of incidents reported and just 35% disclosed the number of incidents that were resolved.
A similar pattern emerged with commitments on human rights. Ninety-one per cent of companies have a public commitment to respect human rights, but almost half (45%) of these companies could not give an example of when they had provided a remedy for a human rights violation.
Equally, 94% of respondents commit to preventing forced labour, modern slavery and human trafficking from their operations and supply chains, but 10 of these companies could not provide any description of their supply chain.
Ms Lush said: “This is the most rudimentary, essential information for beginning to identify and address modern slavery. If a company cannot even generally describe its supply chain, there is a limited likelihood they will be able to make meaningful progress on modern slavery.”
However there were some companies whose workforce reporting and practice stood out from the rest, and for the first time these companies will be acknowledged through the WDI’s Workforce Transparency Awards. Rosie Mackenzie, WDI Company Engagement Manager, said: “Companies often put in considerable effort to compile responses and these awards will celebrate that.”
Winners included Sainsbury’s, who are due to collect the Supply chain data award for disclosing the most data covering their supply chain. Commercial property firm Landsec wins three accolades, including the overall WDI Award for the company with the most complete response.
The WDI is supported by 53 investors with over $7tn in assets under management, from Amundi to Universities Superannuation Scheme (USS).
Sabrina Ritossa Fernandez, senior ESG analyst at Sycomore AM, said:
“At Sycomore AM, we never tire of stressing how important employee wellbeing and mindful human capital management are for the long-term sustainability of a company and society overall. This is why six years ago we decided to dedicate a whole investment strategy to this theme, Sycomore Happy@Work, fully in line with the WDI mission of improving transparency and accountability on workforce issues. The WDI framework is a great help for investors like us, but also for companies in enabling them to go further in tracking their social performance and responsibility, in their own operations and, importantly, across their supply chain.”
Amy D. Augustine, Director of ESG Investing at WDI signatory, Boston Trust Walden, said:
“Effective human capital management can facilitate economic mobility and close opportunity gaps within the workplace and global supply chains. Boston Trust Walden supports the WDI’s efforts to spur companies to disclose decision-useful workforce and supply chain disclosure on par with environmental disclosure that, in turn, can be incorporated into investment decisions and company engagement initiatives.”
Notes to editors
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About the WDI survey
Designed with the input of investors, companies, trade unions and subject matter experts, the WDI survey has been designed to gather information on the issues most crucial to decent work and human rights in the workplace. The WDI survey is aligned with reporting frameworks including DJSI, GRI, the UNGPs and the SDGs, and offers a comprehensive and comparable reporting system.
The survey was open from September to November 2020. It was sent to 750 of the world’s largest publicly listed companies. 141 companies (19%) responded to the survey.
About the WDI
Corporate reporting initiatives to date have failed to generate meaningful and comparable data on workforce issues at scale. The Workforce Disclosure Initiative (WDI) was launched in 2016 to rectify this. By improving the volume and quality of data on workforce governance structures, risk management, health and safety, and other related practices, the WDI enables investors to push companies to improve their policies and practices.
The WDI is run by ShareAction and part funded by the UK Government’s Foreign, Commonwealth and Development Office (FCDO). It is supported by 53 investors with over $7tn in assets under management, from Amundi to Universities Superannuation Scheme (USS). A full list of signatories can be found here.