Thank you to everyone who came to the SHARE Investor Summit 2020 in Vancouver. Over the course of three days, pension funds, Indigenous trusts, universities, foundations and other responsible investors gathered to address the world’s toughest problems.
We’d like to share the Summit’s opening plenary speech about the urgency with which we must address growing inequality, the climate crisis and respect for Indigenous rights and economic reconciliation, by Sharan Burrow, General Secretary of the International Trade Union Confederation, the world’s peak labour union body representing 207 million workers in 163 countries and territories with 331 national affiliates.
A World Out of Balance
By Sharan Burrow
We are living through an age of anger due to a convergence of crises:
- the climate emergency;
- the scale of corporate power; and
- the breakdown of trust in democracy.
And we have yet to see the opportunity costs of unregulated technology.
The imperative to act on climate is a matter of human survival, but with Just Transition measures for workers and communities, it can also offer jobs, security and, with hope, rebuild trust in democracy. Likewise, the waves of technological change with digitalisation and AI, robotry and automation hold vast opportunities but equally hold workforce challenges that also require a Just Transition along with ethical and regulatory decisions that will determine whether we ensure human control, or allow technological determinism, to shape our future.
And even as we confront these urgent challenges, we face a deep anger and a consequent lack of trust in democracy fueled by the despair of inequality, insecurity and a breakdown in trust of governments. Indeed, people are on the streets in every continent, confronting prices they simply cannot afford while watching a small percentage (the one per cent) rake in the world’s wealth. And too often peaceful protest means they are facing authoritarian oppression that in some nations looks like a civil war where only one side has weapons.
This is a tragedy of greed: a world that is three times richer than it was just 20 years ago and yet has failed to share that prosperity with the people. More people will go to bed hungry tonight than world leaders will tell you have been lifted out of poverty.
Labour income share has systematically slumped since the early 1990s, and minimum wage levels and collective bargaining have suffered sustained attack from too many employers, governments and international institutions.
We have a failed economic model that has left people without jobs, or with insecure jobs that are increasingly low paid and often unsafe. Sixty per cent of the world’s workforce are working informally, and that now goes beyond poorer countries to include workers in platform business, Big Tech and tech spinoffs, and that’s without the dehumanising exploitation of the global supply chains on which trade depends – where informal work and modern slavery is increasing.
The social contract has been torn apart.
Quite simply, governments have failed to regulate the labour market, and too many governments, cowered by big business and believing in a right-wing ideology, have directly attacked or allowed attacks on human rights, labour rights, wages and the social security of their own people. When we also consider the failure to regulate global finance to rein in speculation, end tax evasion and introduce the corporate transparency of beneficial ownership registers or use competition policy to regulate global tech monopolies, it is not hard to understand people’s cynicism about the failure of multilateralism, and also the backlash against globalisation.
But a retreat into nationalism is not the solution. Changing the rules of the global economy and ensuring rights and environmental standards as a basis for fair trade and investment is.
Without global rules, working people will continue to face the multiple realities of the climate crisis through the devastation of extreme weather events or changing seasons, military conflict or terrorism – and tragically, state-sponsored terrorism on the rise through increasing authoritarianism, dictatorship or fascism.
The ITUC Global Rights Index shows ever more countries closing democratic space and denying fundamental rights. Born of a loss of hope, people are questioning democracy as a system.
The only answer is to rebuild trust and the rule of law. For the ITUC, this lies in three frontline campaigns.
A New Social Contract
The social contract wrought from the global conflicts of the last century is broken. At the ILO Centenary Conference in 2019, we negotiated a new Declaration on the Future of Work. Our priority is to see this implemented, as it will go a long way to rebuild the social contract, achieve SDG 8 and generate hope for the world’s people.
The centrepiece is a labour protection floor for all workers married with universal social protection as the foundation of this new ‘social contract.’ It must include, amongst other measures, the following: Just Transition for climate and technological shifts; a right to lifelong learning; equal economic participation of women and an end to violence perpetrated against them; fair taxation; provision of care and vital public services including child care, aged care, health and education for all; and renewed commitment to full employment with investment in jobs beginning with infrastructure and care services.
As part of this new social contract, we need to see ‘due diligence’ mandated by governments and thus required, but as core business and risk management for companies and investors to shift from a narrow notion of reputational risk to the establishment of grievance procedures at all levels and the subsequent conciliation or arbitration vital to effect remedy; it is simply the implementation of the UN Guiding Principles on Business and Human Rights in business operations. For investors and corporations, the challenge is to make this core business now!
Thus, even as we engage in the negotiations for a UN Treaty on Business and Human Rights, unions are campaigning for mandatory due diligence legislation. In addition to anti-slavery laws in the US, UK and Australia, there is the Vigilance Law in France, a draft due diligence bill in Germany, Switzerland and Finland, a tripartite compact in the Netherlands and the promise of an EU Directive.
Rights and due diligence must be enshrined into global trade rules as a fair competition floor – in the WTO, in all trade deals – and with compliance measures that afford third-party access for complaints and remedy.
The fact that multilateralism is in crisis should hardly come as a surprise. The fractured trust in globalisation comes in large part from the dominant model of global trade and the resulting inequality it has created over the last 40 years. The exploitative model of global supply chains has taken a machete to the social contract in country after country and perpetrated unbalanced development to the point where inequality is already stated as a recognised global risk. Notwithstanding this, I am still shocked to hear government ministers and trade negotiators say regularly “but trade is not responsible for this’” or “the wealth can be distributed afterwards!”
Trade and investment are necessary for all economies and have generated massive growth in global wealth, but it is the separation of trade from labour rights, from environmental standards, and from financial regulation that is the problem. And with no coherence, no social or environmental floor and without effective compliance, including for workers, at all levels of cross-border trade, the greed of the corporate model has not only dominated but captured governments fearful of the threat of losing foreign investment.
Then there is the threat of the global monopolies like Amazon that expose the failure of competition policy. The denial of workers’ rights, living wages, and secure work by these giants – that simultaneously threaten the viability of business on Main Street – cannot be ignored by governments, consumers or business. Yet no effective due diligence is carried out by investors who are assisting the massive expansion of monopoly corporate power.
By comparison, the surprise is that it took so long for Mark Zuckerberg to say “regulate us!” The risk to his business model is loss of client trust that is rapidly breaking down as the misuse of people’s data, and hate speech, explode.
Indeed, it is vital and urgent to see a global agreement on the governance of data and privacy both to build trust and to avoid the dangers of monopoly power with greater social division.
“Break Up Amazon” is a target campaign for the ITUC with UNI, the ITF and many of our affiliates.
Without rules, big technology monopolies will continue to put both fair competition and people at risk as they consolidate their footprint.
And for investors, beyond the risks to people, domestic companies and the environment, profits are far from a certainty, so we want to see due diligence as to where workers’ capital is invested.
The world needs a New Social Contract!
Our second frontline campaign is fight for a stable planet.
Just Transition for Climate Ambition
Scientists are again raising the alarm. A domino-like cascade of melting ice, warming seas, shifting currents and dying forests could tilt the Earth into a “hothouse” state beyond which human efforts to reduce emissions would be increasingly futile. The scientists also tell us that it is not too late and that measures to rapidly end greenhouse gas emissions are available, but need to be implemented. We also have to put more emphasis on adaptation measures. My own country (Australia) is reeling from fires and now floods. For working people, insurance is no longer affordable in many devastated regions.
We have just 10 years to stabilise the planet to see a chance of limiting temperature rise to 1.5 degrees and just one year to raise ambition in Nationally determined contributions (NDCs) and build national and industry development plans that include Just Transition measures to ensure there are no stranded workers or communities.
But every sector has to transition if we are to meet net zero by 2050 and reduce emissions by 40 percent by 2030. This requires industry policy, innovation, investment and carbon-pricing mechanisms that must further disrupt today’s failed model of trade.
Industry policy is back on the agenda:
- Procurement legislation is vital to climate success.
- Intellectual property rules are not fit for purpose to secure the
- Border adjustment tariffs to protect investment are inevitable without a new development model.
- Investment for climate action will drive shifts and Just Transition policies will ensure inclusion and
A sustainable planet for people requires systems change.
The European Green Deal will consolidate ambition and centralise Just Transition measures. The Swedish legislation for procurement, the UK Climate Act, legislation in New Zealand and Just Transition and legislation right here in Canada are all front runners, but we need to see governments everywhere take responsibility to ensure that the NDCs submitted this year give us a fighting chance to meet 2030 climate goals.
The ITUC’s Just Transition Centre is supporting labour at dialogue tables with governments, cities and industry leaders to ensure both ambition and Just Transition measures. It will take all of us.
While governments, workers and employers have responsibilities to make sure emissions are reduced accompanied with short- and long-term employment plans, so do investors. With the Principles for Responsible Investment (PRI), the London School of Economics, Harvard University and the ITUC developed a Just Transition Investor Guide which was launched last November. Pension funds – $10 trillion dollars have already signed up. We now need to ensure an alignment with practice across the board. In two words: ‘responsible investment’!
And in 2020 we are trying to engage workers everywhere. Invite your employer to a conversation on June 24 to discuss how to climate-proof the workplace – jobs, emissions, sustainable practices – CPOW: Climate-proof our work.
Reputational risk is well understood by CEOs and investors even if it is too often ignored until there is a scandal. However, failing to understand and address social and environmental risk goes well beyond the potential damage to the reputation or share price of a company or an investment house. Decades of such behaviour is now undermining global economic security. An apology for failure won’t fix systemic social and environmental risks. We need behavioural change and the rules to ensure it.
It is possible to ‘future-proof’ our pension funds and reaffirm a commitment to shared values as a basis for operating. We have agreements with many investors, including in my own nation with Industry Funds Management Investors (IFM Investors). We are open for partnership, and our Committee on Workers’ Capital is located here with Share, and I thank Kevin and the team.
Rights, environmental standards and good governance do not stand in the way of prosperity. With these standards and principles as the floor for fair competition, and with ‘due diligence’ enshrined in the operations of companies and investors, we can ensure inclusive growth.
But a final word on our emerging frontline Democracies for people.
We need to rebuild our democracies, and it’s essential to go beyond GDP to rebuild trust in democracy through demands for government accountability that go to full employment, living standards, wages, social protection, public services and political engagement based on social dialogue – issues that reflect people’s concerns at national and international levels. This requires shifts in government accountability. New Zealand, Iceland and Scotland are on this journey, but trust in democracy can only be restored if people sit at the heart of governance.
Together, with the power of many, we can realise the promise of the Sustainable Development Goals on a living planet. The choice to act is ours!