Investors unite to demand respect for trade union rights

Over the past two years, the issue of freedom of association and collective bargaining rights has featured prominently in the engagement programs of several responsible investors in North America. In 2023, at least seven companies have been targeted by proposals on that matter. These received high approval rates, including a majority vote at Starbucks, demonstrating that the risks associated with failure to respect these fundamental rights are of concern to many shareholders.

Efforts to defend trade union rights are set to continue and even intensify in the coming annual shareholder meeting season, following the decision by activist investors to participate in a new initiative by the Global Unions Committee on Workers' Capital (CWC) and its partner unions. On November 28, 2023, investors and trustees representing more than 20 institutions and over US$2,200 billion in assets under management and advisory services launched the Labour Rights Investor Network (LRIN) and released its statement on freedom of association and the right to collective bargaining.

The members of this global network, which includes asset managers and owners, as well as investment service providers, intend to integrate labour rights into their management practices. They urge companies in particular to respect freedom of association and the right to collective bargaining, "fundamental pillars of human freedom" recognized as such by the International Labour Organization (ILO), the United Nations (UN) and the Organisation for Economic Co-operation and Development (OECD).

They point out that respecting these rights confers multiple benefits on companies, including greater productivity, safer workplaces and better employee engagement. On the opposite, says New York City Comptroller Brad Lander, "Ignoring fundamental workers rights risks eroding long-term shareholder value."

Accordingly, the signatories of the LRIN statement call on the boards and senior management of the companies in which they invest to :

• take responsibility for labour rights oversight;
• ensure respect for workers’rights to freedom of association and collective bargaining, for example, by putting in place a due diligence process aimed at detecting, preventing, mitigating and reporting any violation of these fundamental rights, and by undertaking not to interfere with the exercise of these rights by workers; and
• provide disclosures on labour-related metrics to allow investors to assess the labour-related risks to which the company is exposed, such as the percentage of workers covered by collective bargaining agreements, ongoing litigation and regulatory investigations into alleged labour rights violations.

As a platform for education and exchange, as well as a meeting place for issues related to freedom of association and collective bargaining, LRIN will provide investors with useful information and tools to engage with companies on labour issues, fulfill their responsibilities to respect human rights, mitigate workplace risks and generate higher returns. Signatories to the statement include the Shareholder Association for Research and Education (SHARE), the Interfaith Center on Corporate Responsibility (ICCR), two New York City pension funds (New York City Employees Retirement System and Teachers' Retirement System of the City of New York), the New York State Employees Pension Fund, Amalgamated Bank, Aviva Investors, Domini Impact Investments LLC, Ecofi, Ethos Foundation, Folksam, La Française Asset Management Group, PensionDanmark, and Trillium.

Sources: Labour Rights Investor Network, Investor Statement on the Rights to Freedom of Association and Collective Bargaining, novembre 2023, ref. December 14, 2023, Investor Statement on the Rights to Freedom of Association and Collective Bargaining | CWC (Committee on Workers' Capital) (workerscapital.org) ; Committee on Workers’ Capital, About the Labour Rights Investor Network, December 2023, ref. December 20, 2023, About the Labour Rights Investor Network | CWC (Committee on Workers' Capital) (workerscapital.org) ; New York City Comptroller Brad Lander, Comptroller Lander and Pension Trustees Join Global Labor Rights Investor Network, November 29, 2023, ref. December 20, 2023, NYC Comptroller Lander and Pension Trustees Join Global Labor Rights Investor Network : Office of the New York City Comptroller Brad Lander ; UNI Global, Des investisseurs possédant plus de 2,2 billions de dollars d’actifs lancent un réseau mondial axé sur les droits des travailleurs, November 29, 2023, ref. December 7, 2023, Investors with more than USD 2.2 tn in assets launch global network focused on workers’ rights | News | CWC (Committee on Workers' Capital) (workerscapital.org)