More ambition from asset managers on core labor rights

Sharan Burrow, General Secretary of the ITUC, and Paddy Crumlin, President of the International Transport Workers’ Federation, outline recently released baseline expectations for asset managers regarding core labor rights and explain why pension funds should hold their managers to account.

Despite the huge growth in responsible investing and interest in ESG, there is a looming sense that the global financial system is not serving the broader interests of society and undermining efforts to build economies. sustainable and inclusive. This failure has been keenly felt by workers around the world who face attacks on their basic rights at work, deteriorating working conditions and a shrinking slice of the income pie.

According to the International Labor Organization (ILO), between 2004 and 2017, the share of global income earned by workers fell from 53.7% to 51.4%. On core labor rights, the 2022 Global Rights Index highlights a series of worrying trends: last year, 113 countries denied workers their right to form or join a union; the right to strike was violated in 87 percent of the countries surveyed; and trade unionists were killed in 13 countries. These are the worst results reported since the Global Rights Index was first published nine years ago and they come against a backdrop of declining union density and collective bargaining coverage in recent decades.

The global attack on fundamental labor rights along with widespread economic inequality underscores the urgency for greater investor attention and action to tackle the “S” in “ESG.”

ADVICE FOR INVESTORS ON LABOR RIGHTS

But, while there are roadmaps for investors to track progress on climate change, there is very little guidance for investors in the area of ​​labor rights.

Asset owners find it difficult to meaningfully assess their asset managers’ policies and practices in this area, yet these same asset managers often hold large stakes in publicly traded companies and private assets. where violations of workers’ rights occur.

Imagine if the world’s largest asset managers used their considerable influence to fight workers’ rights abuses at publicly traded companies like Amazon.com and Teleperformance, or similar labor issues at private market assets like Cadent. Gas in the UK or the operations of the DIAM group in Turkey?

This is what the Global Unions Committee on Workers’ Capital (CWC) has set out to accomplish, mobilizing its global network of unions and pension fund trustees to hold global asset managers accountable for rights. workers.

Through the CWC’s Asset Manager Accountability Initiative, pension fund administrators and staff from more than 40 pension funds in countries including Australia, Finland, the Netherlands, Spain, the United Kingdom, Switzerland, Canada and the United States, engage with companies such as BlackRock, State Street Global Advisors, UBS Asset Management and Macquarie.

These engagements provide an opportunity for asset-owning clients to voice their expectations that asset managers who aggregate worker capital will use their influence to achieve better outcomes for workers whose rights are being violated.

These commitments are guided by a set of core fundamental labor rights expectations for asset managers, which draw on the ILO Fundamental Principles and Rights at Work, the OECD Guidelines to for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

The Core Expectations provide the labor rights roadmap that investors have been missing, outlining expectations in four areas: overall management framework; public actions (including proxy voting and pledge); private markets (including infrastructure and property management); and political advocacy.

The CWC uses baseline expectations to guide ESG discussions with global asset managers towards real impacts for workers – beyond simple tick boxes and ESG marketing.

Now let’s see if, five years later, we can write another editorial and report that the asset management industry is reacting decisively to workers’ rights abuses in their investments.

In the meantime, the CWC will continue to mobilize asset owners to hold their asset managers to account on core labor rights in ESG management policies and practices.

Click here to view the CWC Baseline Expectations.

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