Canadian Investment Review

Putting decent work on corporate agendas

Written by Yaelle Gang on Wednesday, March 13th, 2019 at 9:32 am

builder with yellow helmet and working gloves on building site © kuzma / 123RF Stock PhotosThe Shareholder Association for Research and Education has filed multiple shareholder proposals related to decent work and expects to file more, with the aim of bringing this focus higher up North American companies’ corporate agendas.

The term ‘decent work’ is used by the United Nations and the International Labour Organization, says Shannon Rohan, director of responsible investment leadership at the SHARE, noting it can be defined broadly as covering all aspects of work including fair wages, stability and predictability for workers, benefits, health and safety, ensuring employees have a voice on key issues and collective bargaining.

“We’ve been engaging for years and years with companies around labour practices and labour standards and issues around labour rights and human rights in the supply chain, for example” she says. “We have really started looking at getting more information from companies on their approach to their workforce, and that started with this recognition that workers are a key asset to companies. And yet, when you start digging into company reporting and disclosure, it’s really hard to get meaningful data from companies about their workforce.”

The SHARE has spent a number of years reaching out to companies asking them to improve their disclosure of certain metrics and has been involved in a global initiative on workforce disclosure, says Rohan.

The workforce disclosure initiative unites investors in requesting comparable data from companies through an annual survey. The list of signatories includes many pension funds, such as the Canadian Labour Congress Staff Pension Plan, the OPSEU Pension Trust and the United Church of Canada Pension Plan.

“We want better data and disclosure, but we also want stronger due diligence, we want clearer workplace standards and we also want evidence that there is capacity at the board level to actually oversee how companies are managing their workers,” says Rohan.

While the specific resolutions filed by the SHARE differ depending on the particular company, investors are increasingly recognizing that workers and human capital management are important sources of value. As well, investors are recognizing that, when these aren’t being managed well, it creates a potential source of risk, adds Rohan.

“At the broader level, investors are also seeing the impacts of income inequality across their portfolios, so not necessarily at an individual company level, but looking at the economy as a whole. Issues around economic growth, issues around political instability — all of these things have an impact for investors in terms of their exposure to the entire economy. So I think all of those things are leading investors to be paying more attention to some of the social issues broadly and decent work and human capital management fall squarely in that space.”

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