Workforce: Driving value through DisclosureDownload a PDF of this article
How the Workforce Disclosure Initiative can improve practice, enhance ESG credentials and drive corporate value
The UK regulatory landscape has changed – there is an expectation that employee voices play a role in the Boardroom.
The market landscape has changed – investors are increasing their focus on employees as a central part of value creation.
As companies grapple with how best to address this issue, there is an opportunity to leverage the Workforce Disclosure Initiative (WDI). With pressure from all angles, and a framework increasing in popularity, those who do not consider it may become laggards of sorts.
It has been well documented that the COVID-19 pandemic has accelerated the focus on the ‘S’ or ‘social’ element of ESG. As the virus spread across the globe, relationships between companies and their workforce came into sharp focus and drew increased attention from investors and the media. Industrial relations, supply-chain issues and workplace health and safety have dominated Board agendas as well as the headlines for much of the past year. As society grappled with the impact of the pandemic across our communities, the health and well-being of essential workers became a priority. And although we were already seeing a shift under way, as companies focused on purpose and workplace culture, the COVID-19 pandemic accelerated these changes at a rapid rate.
In a recent paper titled ‘Time to Rethink the S in ESG,’ we looked at examples of how companies implemented ‘S’ practices, such as labour issues, workplace health & safety, and product safety & quality. It was evident that how companies perform through this lens was a barometer for the strength (or not) of its corporate culture. Where companies have a strong culture that is shared and understood across the organisation, ‘S’ practices tend to be strong. Where culture is poor or considered ‘toxic,’ ‘S’ tends to follow the same pattern.
Across the globe, coronavirus outbreaks in working environments have been linked to companies with poor working conditions, shining an unflattering light on to the supply chains of developed countries. These issues, among many others have led to investors demanding more transparency from companies on issues that affect their workforce.