The Global Unions’ Committee on Workers’ Capital (CWC) has released its Baseline Expectations for Asset Managers on Fundamental Labour Rights. Developed by trade unions and pension fund board members as part of the Asset Manager Accountability Initiative, the CWC Baseline Expectations will help asset owners hold asset managers accountable on fundamental labour rights.
Global asset managers invest capital on behalf of workers’ retirement savings funds, positioning them to not only provide long-term financial returns to beneficiaries, but to also use their investing power to better advocate for Fundament Labour Rights. Pension fund trustees who sit on the boards of these funds expect their managers to uphold their responsibilities to mitigate adverse labour impacts in their investments, but up until now, have not had a clear set of expectations to guide their relationship. Likewise, other types of asset owner vehicles, including foundations and religious investors, also have growing expectations of their managers.
“Global asset managers can hold sizeable stakes in public and private market investments where fundamental labour rights, such as the right to freedom of association and collective bargaining, are violated” said Paddy Crumlin, President of the International Transport Workers’ Federation (ITF) and vice-president of the CWC. “Asset owners can now use the Baseline Expectations to drive actions by asset managers to use their influence and ultimately drive impact on the ground for workers whose rights are violated.”
The CWC Baseline Expectations progress from “baseline” into “good practices” and are divided in four categories from which to assess an asset manager’s level of commitment to respecting and upholding fundamental labour rights:
- Stewardship framework;
- Stewardship practices in public equities (proxy voting and shareholder engagement);
- Stewardship practices in private markets; and
- Policy advocacy
The framework is anchored in the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises which lay out investor responsibilities to carry out due diligence and prevent or mitigate adverse environmental and social impacts.
“Marketing around ESG investment has put the onus on asset owners to differentiate the asset managers that walk the talk from those that don’t on human and labour rights stewardship” said Christoffer Jönsson, CEO of Folksam LO Pension and chair of the CWC. “Amid the crosshairs, I will use this tool to ask questions of our external asset managers with the aim of encouraging a race to the top.”
The CWC Baseline Expectations were developed collaboratively by trade union officials and pension fund trustees affiliated to unions, including: the Australian Council of Trade Unions (Australia), AFL-CIO (USA), Comisiones Obreras (Spain), FNV (Netherlands), the International Trade Union Confederation, UNI Global Union, the International Transport Workers’ Federation and the Trade Union Advisory Committee to the OECD (TUAC).