The number of companies disclosing information about their workplace practices — and that of their supply chains — has doubled this year, thanks to co-ordinated action by ShareAction.
Ninety global companies, including 21 of the world’s largest corporations, will now provide this data to shareholders via the annual Workforce Disclosure Initiative (WDI).
This WDI quizzes companies on topics including diversity, wages, health and safety, contracts, worker voice, and procurement practices.
ShareAction a coalition of more than 120 global investors, including Amundi, Axa Investment Management, LGIM, M&G Investment and UBS Asset Management.
This information will be used by asset managers to assess environmental, social and governance (ESG) risks as part of their stock-picking process. Investors are increasingly seeking this type of comparable data in order to engage with the workforce practices of investee companies.
Companies now sharing this data with investors includes Adidas, AT&T, BHP, H&M, Microsoft, Nestle, Rolls-Royce, Sainsbury’s and Toyota.
In total those firms disclosing this information have a footprint in more than one hundred countries where they employ upwards of 8.3 million people, and have business relationships with more than 1.5 million suppliers.
However, many well-known names failed to engage with the investor request. These include Apple, BP, China Mobile, Fresnillo, Glencore, Tesco, and Walmart. These firms have declined to participate in the WDI for two consecutive years, often citing a confidence in their existing public reporting that is not shared by WDI investor signatories.
ShareAction says that disclosing this information should help improve the quality of jobs worldwide and helping to tackle inequality and poverty.
Axa IM head of responsible investment Matt Christensen, says: “Axa IM is a strong supporter of the WDI and is pleased to see the growing number of reporting companies.
“We are confident the current void in social metrics will be bridged by the WDI, which we expect will become a reporting standard. As long-term responsible investors with several social-related funds, the data collected against the WDI are used to provide in-depth and complementary information to our social performance and impact assessment.
“It constitutes, as well, a solid basis for our engagement with companies around social considerations and helps us make processes evolve in the right direction – both at operational and supply-chain levels.”
ShareAction head of programmes, Amy Metcalfe says: “There are challenges to disclosing more workforce data. But the leadership shown by 90 companies across 11 sectors demonstrates that these challenges can and should be overcome.
“Not least because the reporting process provides insights that benefit corporate governance, and because calls from shareholders, civil society, and worker organisations for better data and action to deliver on the promise of decent jobs are only getting louder.”
The WDI report reveals that, in general, disclosures lacked detail on risk management processes, with 51 per cent providing no detail on who is involved in the workforce risk management process, how frequently it is carried out, or what areas of the business are covered – potentially a major concern for investors, particularly when identified risks relate to core human rights.
Given systemic challenges like inequality and precarious work, the fact that much of the data lacked detail on how companies manage and protect low paid and supply chain workers warrants further investigation. For example, just 24 per cent of companies said they monitor wage levels for this type of staff, even though they are particularly vulnerable to poor conditions and exploitation.
The report is launched at the Sedex Conference inLondon today, and at the ICCR Conference in New York.
Shannon Rohan, responsible investment leadership director at SHARE adds : “Better disclosure from companies about decent work practices is an opportunity for boards of directors and management to see the value of their workforce and how to improve workplace practices.
“For investors, promoting better assessment and reporting can help demonstrate the value of decent work for company performance. Too few companies provide meaningful reporting on their approaches to managing their workers, leaving investors ill-equipped to identify leaders and laggards.”