Varma Mutual Pension Insurance Company is joining the Workforce Disclosure Initiative (WDI), which aims to improve the quality of jobs in companies’ operations and supply chains.
More than 120 international investors, with $13 trillion in assets under management, have signed the WDI. The initiative provides investors with substantial and comparable data from companies on how they manage workers in their direct operations and supply chains.
“Developing working life and respect for human rights are our key focus areas in responsible investment. When we present a united front as investors, we carry more weight and can influence not just entire industries, but also investees in which we do not have a holding,” says Hanna Kaskela, Varma’s Director of Responsible Investment.
Among the Sustainable Development Goals set by the United Nations in 2015 are reducing inequalities globally and achieving economic growth by promoting decent work. Particularly in developing countries and emerging economies, many occupations continue to be poorly paid, involve hard labour and may also be hazardous. Legislation governing the position of the worker is lacking.
The objective of the WDI is not just to call companies’ attention to the working conditions of their operations and supply chains, but also to contribute to practices that promote respect for human rights. Multinational companies with global operations play a key role in improving wellbeing of millions of workers.
“Human rights violations in companies or in their supply chains are as much of a reputation risk as environmental factors. Consumers want to buy sustainably produced goods, and their purchasing decisions are influenced by how companies treat the employees in their supply chain,” stresses Kaskela.
Consistent reporting improves data on working conditions in supply chains
Last year, 90 companies representing 38 industries disclosed data on their employees’ working conditions and supply chains to the WDI survey. Twenty one of the 100 largest companies in the world took part. The companies that disclosed to the WDI employ 8.3 million people in their direct operations and have 1.5 million suppliers. The impacts of the supply chain extend to more than 100 countries.
Companies that have committed to the WDI consistently disclose practices related to their labour force and supply chain. This gives investors more reliable information on the risks and opportunities related to workers, as well as companies’ remuneration practices and local legislation governing the employer’s operations.
“Traditionally it has been very difficult for investors to obtain clear information about supply chains and working conditions, and the Workforce Disclosure Initiative provides more tools for this. We need information about whether companies are bearing their social responsibility when it comes to their employees. In countries where labour legislation is weak, these disclosures also contribute to the creation of practices that improve the quality of work,” says Kaskela.
The WDI is funded by the UK’s Department for International Development (DFID). A range of civil society and private sector organisations from a number of countries are also helping to shape the WDI.
Hanna Kaskela, Director of Responsible Investment, tel. 040 584 5045