The Workforce Disclosure Initiative: yet another benchmark?

On the 6th of June, the Conference of the Workforce Disclosure Initiative took place, powered by Shareaction, Share and Oxfam and supported by over 120 institutional investors, including Achmea IM. In a time in which many benchmarks on Corporate Social Responsibility are published, it makes you wonder if yet another benchmark is necessary?

The answer is .... yes, and even one might add; why hasn't it already been done before? The main reason is that one of the most important societal impacts companies can have is how they treat their employees. Think of the gig economy, living wages, the societal debate on remuneration of top management, digitization and the effects on employment, a just transition in regard to climate change, equal opportunities, the growing divide in incomes, the role of corporation in lifelong learning, freedom of association, forced labour and many more salient topics.

Surprisingly, in most annual and CSR reports it is acknowledged that employees are the most important asset of the company. However, when you dig deeper into the reports most companies actually have little information on how they manage and treat their workforce. For example if and how the company invests in training, if the wage growth of the board is aligned with the wage growth of employees, if a company has decent grievance mechanisms, turn over rates of employees and which types of contract a company provides. All topics that are relevant from a corporate, investor, employee as well as a societal perspective

The Workforce Disclosure Initiative gathers this information, and by doing so also nudges companies to be more transparent on their workforce management and to improve on this topic. However, that is only a first step and institutional investors have an important role to play and to integrate these findings in investment management, voting practices and engagement to put workforce management firmly on the corporate agenda.

What do you think institutional investors should do in regard to workforce management? Please let me know in the comments.