More companies are disclosing data on their workforce policies and practices, making it easier for investors to assess and compare them, and conduct responsible stewardship activities.
In 2020, 141 companies completed ShareAction’s Workforce Disclosure Initiative (WDI), a net increase of 20% from 2019. Since 2017, submissions have increased year on year.
The WDI aims to “improve corporate transparency and accountability on workforce issues, provide companies and investors with comprehensive and comparable data and help increase the provision of good jobs worldwide”.
“Investors are really interested and really wanting to engage with companies on their workforce but they don’t have a set of data they can do that on,” a ShareAction video explaining the initiative said.
A coalition of 52 investors with assets valued at $6.5trn supports the WDI, whose annual survey calls for listed companies to disclose information on key workforce-related topics including pay, contract types, diversity and supply chain transparency. Investor signatories include Nest and Aberdeen Standard Investments.
Responding companies have a combined market capitalisation of $7.9trn. Participants report having 12 million direct employees and some 1.4 million Tier 1 suppliers.
Covid-19 highlights disclosure need
Last year, the Covid-19 pandemic proved challenging for many companies. Some companies that had previously responded did not complete the WDI 2020 and a number of firms furloughed staff responsible for corporate reporting.
But the 2020 WDI also saw new responders, including Legal & General. ShareAction noted that even though the pandemic has hit some sectors harder than others, 2020 WDI responses increased across all sectors.
In fact, the pandemic has increased scrutiny of working conditions and awareness of the benefits of transparency, as well as raising expectations for how companies should look after their staff and suppliers.
“The need for reliable, relevant and comparable data on companies’ direct and indirect workforces is greater than ever,” said Candriam lead ESG analyst – engagement and voting, Sophie Deleuze.
“The pandemic has accentuated this need, testing the management of human resources for direct employees, suppliers and subcontractors. As a responsible investor, Candriam needs WDI data to better understand the specifics and the associated challenges of every company in which we invest.”
Deborah Lee, group engagement manager at Compass Group, added: “As one of Europe’s biggest employers, we have found the WDI to be a useful framework to help us understand what investors want to know about our organisation. The disclosures allow us demonstrate progress as well as the areas that need more focus and improvement.”