The Workforce Disclosure Initiative offers firms a way to demonstrate how they intend to look after employees and suppliers in the months and years to come, says ShareAction's James Coldwell

Since the start of the Covid-19 crisis, business has been in a fight for survival. As the emergency subsides, societal expectations of business have been reset and companies are looking for a way to respond to this changed reality.

A recent study by Just Capital is indicative in this regard. The report assesses the initial responses of the 100 largest public US firms to the crisis, logging actions including furloughing staff, support with dependent care, health and safety provision and remote working options. As “build back better” seeks to evolve from a catch-all slogan to a practical programme for a more resilient economy, companies should expect demands for transparency and comparability to increase.

The pandemic is as far reaching as any economic shock since the Second World War. Very few businesses are untouched. Sectors like apparel and mining, traditionally considered high risk for safety and workers’ rights abuses, continue to receive significant attention. The Bangladesh Garment Manufacturers and Exporters Association estimates that 2.3 million Bangladeshi workers have been affected by order cancellations from multinational retailers. Meanwhile, an NGO report highlights how mines have become hotspots for Covid-19, including several sites in Canada and the US.

Even businesses whose operations have withstood the shock relatively well have undergone profound shifts in how they manage staff

But this crisis has upended conventional understanding of workforce risks. Sectors like hospitality and leisure are viewed very differently compared with the start of 2020, given the increased risk of infection faced by workers in customer-facing roles. Huge companies have received government bailouts, often with strict conditions attached related to treatment of workers. Renault was bailed out by the French government in exchange for commitments to retain and retrain workers slated for redundancy. The status of workers in supermarkets, transportation and food production has risen rapidly; after the crisis, consumers will rally behind employers who reward their workers accordingly, with better pay, greater job security and opportunities for progression.

Even businesses whose operations have withstood the shock relatively well have undergone profound shifts in how they manage staff, particularly around remote and flexible working. Facebook and Twitter have told staff they can work from home permanently if they wish. In the UK, one third of workers across all industries say the ability to work remotely will influence their next job move. Some firms have seen demand for their services increase under lockdown. Larger numbers have skirted with bankruptcy. All are recalibrating how they manage staff and suppliers.

Investors, unions, governments and the public are watching with interest. In particular, companies will be expected to go beyond warm words of support for their workers, and demonstrate how they intend to look after employees and suppliers in the months and years to come.

The Workforce Disclosure Initiative (WDI) offers companies a way to demonstrate their commitment to their workers and to transparency on social responsibility. An investor-backed programme promoting corporate transparency, the WDI asks multinationals to report on a broad range of workforce issues whose salience has increased markedly in light of Covid-19. Since 2017, companies disclosing data to the WDI have provided evidence of efforts to improve health and safety standards, policies and practices related to employee wellbeing, and actions relating to supply chain management. This data, much of it freely and publicly available, offers a glimpse of the pre-Covid efforts companies made to address many issues highlighted by the April 2020 Investor Statement on Coronavirus Response.

Since its inception, one section of the annual WDI survey has been dedicated to occupational health and safety (OHS), and wellbeing. Worryingly, in 2019, companies responded on average to only half of the questions in this section. Clearly companies have much work to do, and WDI signatories will expect a big improvement this year. That said, some firms have reported detailed quantitative and qualitative information on OHS activities. To take just one example, three-time discloser Anglo American reported a 9% decline in employees at risk of exposure to inhalable hazards after introducing workplace condition-monitoring technology.

Greater transparency should be the quid pro quo for a private sector receiving 'its largest aid package in history'

The WDI’s breadth means it can easily pivot to give greater attention to OHS as investor interest increases. The 2020 survey will incorporate new questions, proposed in many instances by investor signatories, to assess and compare how companies are responding to the Covid-19 pandemic.

It is still too early to draw firm conclusions, but our interactions with companies so far this year indicate, if anything, a greater openness to sharing more specific and comparable information on how they treat their workers.

In April, Lynn Forester de Rothschild of the Coalition for Inclusive Capitalism argued that greater transparency should be the quid pro quo for a private sector receiving “its largest aid package in history”. As companies respond to the new reality, the WDI offers a ready-made platform for them to communicate their workforce priorities to an expectant public.

James Coldwell is programme lead for Workforce Disclosure Initiative at ShareAction.

 

Just Capital  Covid-19  Bangladesh Garment Manufacturers  ethical employers  Renault  furlough  Build Back Better  WDI  ESG  ShareAction  Anglo American  Coalition for Inclusive Capitalism