By: Shannon Rohan, Director of Responsible Investment
Each year, millions of workers across the world celebrate May 1st, International Workers’ Day, as their Labour Day. The origins of International Workers’ Day dates back to 1886 when over 200,000 workers in the U.S. organized a nationwide strike for an eight-hour workday.
Today, workers continue to struggle for decent work. Many workers are facing low and stagnant wages, insecure employment, wage theft, misclassification and other kinds of precarious work situations. In Canada, it is estimated that precarious forms of employment have increased by nearly 50% in the last 20 years and that workers in precarious employment earn only 57% of a standard hourly wage.
At the same time, there are new voices joining the struggle to address income inequality and improve the working conditions of workers globally. For example, the World Economic Forum is one of a number of international organizations that have identified inequality as a serious threat to the global economy. A 2015 study by the OECD concluded that inequality had shaved 4.7 per cent off economic growth between 1990 and 2010 in OECD countries. Meanwhile the IMF’s Christine Lagarde recently stated, “If you want to see more durable growth, you need to generate more equitable growth.”
Institutional investors – recognizing the potential risks of growing inequality on their portfolios – are also starting to pay attention. In the United States, for instance, approximately 35 shareholder proposals were filed in 2016 addressing different aspects of inequality and decent work, including pay equity, pay disparity and labour standards in the supply chain. In the UK, an investor-led campaign has successfully encouraged over 30 FTSE 100 companies to become accredited Living Wage employers.
Investors are also starting to recognize that corporate workplace practices can have material impacts on corporate performance and that companies that pursue a decent work strategy can benefit from improved productivity, operational efficiencies, lower turnover and improved brand value. For example, the Human Capital Management Coalition, a consortium of 25 diverse global institutional investors representing $2.6 trillion in assets, was formed to engage with companies to improve how human capital management contributes to the creation of long-term shareholder value.
Over the past ten years, SHARE has worked extensively through our shareholder engagement program to promote decent work policies and practices by companies. We have facilitated investors’ calls to improve health and safety at workplaces in Canada and labour standards in global supply chains including freedom of association, living wages and forced and child labour. These efforts are leading to improvements in company policies and practices – but there is more work to be done.
In 2016, SHARE and the Atkinson Foundation launched Valuing Decent Work – an initiative that is mobilizing Canadian investors to advocate for robust decent work policies and practices in investee companies. However, in order for investors to encourage a race to the top, we need more and better information on what companies are doing now.
That is why SHARE is collaborating with ShareAction in the UK on the Workforce Disclosure Initiative (WDI). Modelled on the CDP (Carbon Disclosure Project), the WDI is bringing institutional investors together to secure comparable workforce reporting from listed companies. The WDI will provide investors with crucial insights into how companies are managing their workforces, and how they compare with their peers.
Just shortly after its launch, the WDI has over 30 investor signatories confirmed from 7 countries, including 15 from Canada. SHARE believes that the WDI is the next wave in the rising tide of investor action to promote decent work and invites Canadian investors to get involved.