Labour Party Conference Fringe 2024 ‘A new deal for working people – how will investors react?’

 Labour Party Conference Fringe 2024

‘A new deal for working people – how will investors react?’

Sunday 22 September, 12.30 – 13.30, Room 6, Liverpool Arena

SPEAKERS

· Liam Byrne MP, Chair, Business and Trade Select Committee and Chair, Global Parliamentary Network on the World Bank and IMF

· Janet Williamson, Senior Policy Officer Corporate Governance Policy and Collective Bargaining, TUC

· Cllr John Gray, Vice Chair, Local Authority Pension Fund Forum (LAPFF)

· Chair: Clive Betts MP, Chair Local Authority Pension Funds Westminster Forum

I am looking forward to the Labour Party conference and intend to visit as many Social housing and pension fringes as possible. On Sunday I am taking part in a panel debate on behalf of the Local Authority Pension Fund Forum.

Committee Workers Capital (CWC) online Conference 2020 - The Road Ahead

 I logged on this evening to the first session of the Conference. The CWC describes itself on its website "WorkersCapital"   "With over 700 participants from 25 different countries, the Committee on Workers’ Capital is an international labour union network for dialogue and action on the responsible investment of workers capital. We connect labour activists and asset owner board members from around the world to promote information sharing and joint action in the field of workers’ capital. We are a joint initiative of the International Trade Union Confederation (ITUC), the Global Unions Federations (GUFs) and the Trade Union Advisory Committee to the OECD (TUAC)".

I have been to physical meetings of its annual conference in London and Amsterdam in the past and always found them really interesting and useful. Obviously this year's setting it is very different.

The conference was opened by Tuur Elzinga, Vice-President and International Secretary of the Dutch Confederation of Trade Unions (FNV), Chair of the CWC.

Sessions start 4pm (Current UK time) and last 75 minutes. There are recordings available of each session. There are also 3 "Campaign Spotlights", an interactive space where CWC participants will showcase a priority initiative from their union.

you can register below

https://www.eventbrite.ca/e/cwc-2020-virtual-conference-tickets-123523793993

My question to session one panel "What does the panel think about pooled pension funds that refuse to allow asset owners to vote shares at AGMs in line with their ESG policies. Or is this only a British problem?" but panel ran out of time. 

16 Nov 

DAY 1: 4pm for 75 mins
How do asset managers view and incorporate worker-backed evidence in public equities?
This session will evaluate current practice and potential to improve how asset managers incorporate trade union and worker provided information in their evaluations of companies. (Chaired by Janet Williamson from TUC)

The first Campaign spotlight for today was by on UNICARE on the need for workers capital to take action over Covid 19 and nursing home deaths. A fascinating presentation which shows that "for profit" nursing homes suffer more deaths led by Adrian Durtschi, Head of UNICARE (Switzerland) and Lisa Nathan, Investor Engagement Advisor . Next spotlight was "Democratic Capital and workers voice" by Dr. Ewan McGaughey, King's College. A much needed argument to win a more accountable economy.

DAY 2: 4pm
Racial Justice and the stewardship of workers' capital
Global protests from the Black Lives Matter movement have brought attention to systemic racism in every corner of the economy. This session will begin with a panel of speakers, followed by a participant-led Q&A to share perspectives and strategies on how investors can approach the issue of racial justice.

DAY 3: 4pm
Tools and examples to hold asset managers accountable
This session will review recent tools and examples used by asset owners to hold their asset managers accountable on ESG issues, with a particular focus on the "S".

DAY 4: 4pm
Charting the Road Ahead: A strategic brainstorming session on CWC priorities for 2021
This interactive session will be an opportunity for participants to share their views on priorities for the 2020-2021 CWC workplan. What does a worker-centric agenda look like in this new context of a global health and social crisis? Discussion will be facilitated using a mix of discussion groups and open-ended discussion

Doing business the right way benefits everyone

"I don't always agree with Conservative ministers, but I did at the launch of a report last month on the Workforce Disclosure Initiative (WDI), where minister for international development (who funds the WDI in partnership with Oxfam) Harriet Baldwin MP said: "If we want to eliminate poverty in all its forms then the world needs to create jobs and that creation happens by investment. 

But those jobs must be good jobs without labour rights abuses. Too many people in the world are physically and mentally impacted negatively by work. Doing business the right way benefits everyone." 

What the WDI has done in its pilot year is to ask 75 global companies how they manage their workers and, by this disclosure, it hopes to mobilise institutional investors to push companies for better jobs. One of its recommendations was that there should be as much reporting by companies on how they treat their workforce (including their supply chain) as on climate change.

The launch was not only about treatment but also the future of work itself. The opportunities from technology but also the dangers. I enjoyed the ‘tale' by the WDI executive chair, Richard Dickinson, who in his opening remarks said: "A Ford motor manager shows a union leader around a new car assembly line made up of robots. The Ford manager says he would be interested to know how the union will get union dues from robots. The union leader replies by saying he would be interested to know how robots will buy cars."

The initiative seems to be gaining momentum. In July 2017 the campaign had the backing of 79 investors with $7.9trn of AuM. In April 2018, 96 investors with $10trn AuM were backing the WDI. I am a trustee of a pension fund that has backed the initiative. The companies that responded to the initiative are commended in the report for their efforts and providing examples of good practice.

Despite the perceived success of those who did participate, only 34 out of the 75 global companies agreed to take part, which as an asset owner makes me wonder why? There could well be legitimate reasons but, for the life of me, I can't understand why they would not support an initiative funded by the British government, supported by respected international organisations and backed in many cases by their own shareholders?

At the meeting, Janet Williamson from the Trades Union Congress (who is also a pension trustee) said: "There is a high road to profitability and a low road. In the short term you can make profits from treating your workers badly. The high road is better. Sustainable profitability is via the high road."

If, going forward companies, still refuse to participate in the WDI then you need to question whether or not they are suitable for your fund to invest in. Obviously, you will have to take professional advice, but if they don't want transparency with regard to the way they treat workers then you have to consider are they equally keen to avoid scrutiny on other important governance issues such as boardroom pay or environmental impact?

One thing that I did point out at the launch is that while the UK is clearly not as bad as many developing countries in the way companies treat workers, we must get our own house in order as well.

In my daytime job as a trade unionist, I represent workers in the UK who live in poverty, have insecure employment, awful housing and feel hopeless and betrayed. Unless we clean our own house, concern for those overseas may be seen as crocodile tears.

Finally, I assume it was not coincidentally that the launch was on May 1 - otherwise known as International Workers' Day.

 John Gray is a pension trustee and chair of a local authority pension committee. He is writing in a personal capacity only.

Hat tip Professional Pensions (and Eve for stealing from her excellent notes of the meeting)

May Day Workplace Disclosure Initiative - "Improving the quality of jobs".

I went to fascinating (and packed)"May Day" meeting today as a Pension trustee asset owner on the launch of a new report by the "Workplace Disclosure Initiative" on "Improving the quality of jobs". 

One of its recommendations was that there should be as much reporting by companies on how they treat their workforce (including their supply chain) as on climate change. 

I will blog further once the local elections madness are over but I was impressed with the story told by its Executive Chair, Richard Dickinson in his opening remarks.

“A Ford boss shows a union leader around a new car assembly line made up of robots. 
Boss says he would be interested to know how union will get union dues from robots. 
Union leader relies by saying he would be interested to know how robots will buy cars"

My question to a panel debate was this:-

"As a trade union activist I had the choice today of going to this event or the traditional May Day march & rally in Trafalgar Square. Despite the beautiful weather, I am pleased with what I am hearing here. However, while the UK is clearly not as bad as many developing countries in the way they treat workers, we must get our own house in order as well. I represent workers in the UK who live in poverty, have insecure employment, awful housing and feel hopeless and betrayed. Unless we clean our own house, concern for those overseas may be seen as crocodile tears. 

My question is does the panel agree that in the long term, companies who treat all their workers well will tend to produce superior investment returns?

I was pleased that the panel was broadly supportive. Janet Williamson from the TUC said there is a  high road to profitability and a low road. In the short term you can make profits from treating your workers badly  The "high road" is better. You do need "vision". Sustainable profitability is via the high road. Decent work should be "business as usual". 

Democracy in the Workplace: Newham Compass Tuesday 20 June

Shame this clashes with UNISON National Delegate Conference. I don't think I have met Scott but Janet is a very experienced and thoughtful trade union official and also chairs Trade Union Share Owners. 

Victory for decency at work - Sports Direct will hold an independant review into its employment practices.

In what is also a victory for effective pension stewardship, "workhouse employer" Sports Direct agreed to hold an independent review into its awful working practices and governance.

See TUC press release below

"Trade Union Share Owners welcome Sports Direct announcement on independent review

20 September 2016

Trade Union Share Owners (TUSO) have welcomed the announcement today (Tuesday) by Sports Direct that there will be an independent review of the company’s working practices and corporate governance.

The announcement follows a resolution calling for an independent review that was tabled at the company’s AGM earlier this month by TUSO, and supported by a majority of independent shareholders.

TUSO Chair Janet Williamson said: “This is good news for Sports Direct workers, especially young workers who make up a large part of their staff but too often get a poor deal at work.

“The board should now consult both shareholders and trade unions in finalising the plans for the independent review. Trade unions representing workers at Sports Direct stand ready to work with the company to ensure a successful future that is fair for its staff.”

NOTES TO EDITORS:
- The Trade Union Share Owners (TUSO) is a group of investors representing the financial assets of the labour movement, including the TUC staff pension fund, the Unite staff pension fund, the UNISON staff pension fund, and the International Transport Workers’ Federation.
- All TUC press releases can be found at www.tuc.org.uk"

Hat tip cartoon Kipper Williams, the Guardian

Workers' Capital Conference 2015 (Day 2)

This is a little late. I have posted here and linked here on the first day of this global annual conference for trade union pension trustees and organisers that took place earlier this month.

(On my https://twitter.com/grayee account I tweeted on the presentations and speeches which I have now used to write this post).

The day was started by a welcome speech from Toni Heerts (FNV) Committee Workers Capital Chair & Co-Chair Paddy Crumlin (ITF). 

The 1st plenary was on "Embedding pro-labour practises & policies for responsible investment". Willem Noordman from the Dutch Pension Federation recognised that engineering unions would have a different view of arms production than others but all unions have plenty in common. There is a real dilemma that if we disinvest from a company because we don't like their practises that we lose all influence over them.

Tom Croft, from the USA Steel Valley Authority in Pittsburgh pointed out that the "S" in "ESG" principles (Environmental, Social and Governance) is too often forgotten.

Pension trustee and national officer, John Neil, from Unite spoke about the Trade Union Shareholders Organisation (TUSO) in the UK. Trade union staff pension funds in the TUC, UNISON, Unite and the ITF combine collectively to make sure that all the shares they own are voted in the interests of "pro-labour" at company AGMs (such as the rogue UK company "Sports Direct" the following day)

A number of international speakers mentioned TUSO at the conference and that they hoped that something similar would be set up in their countries.

I asked the question is there evidence collated of "pro-labour" companies that have proved to be long term good investments that we can show our trustee Boards? Tom Croft responded that in the USA there are certain Private Equity companies that have humanely restructured firms & saved jobs.

Next Janet Williamson from the TUC chaired a panel on 2022 World Cup construction deaths in Qatar.  Gemma Swart from the ITUC spoke about the modern day slave camps in Qatar and that investor pressure over reputational risk can bring about change since the whole country is essentially a family business.

Roel Nieuwenkamp from OECD pointed out that they have introduced binding guidelines on contractors including supply chains with a grievance procedure. "Soft law with hard consequences". He used an example of a complaint by a NGO against Formula1 over human rights in Bahrain and there could be a similar one against Fifa over Qatar.

Hugues Letourneau  from CWC on their human/labour rights campaign in Qatar points out that there has been 279 Indian migrants deaths so far. They are putting pressure on UK and French construction firms via "investor letters".

Cllr Richard Greening from LAPFF  spoke about their engagement with companies exposed in media working in Qatar at AGMs & face-to-face meetings.

(after this session I had to go to a work meeting and missed the debate on infrastructure investment which I understand was pretty heated at times. Some delegates believed that such investment was being misused to privatise public services)

I came back to hear Nick Robins from UNPRI enquiry on the "Design of a Sustainable Financial System".  He believed that there was evidence of a "quiet revolution" in Green investment despite agreeing the Governor of the Bank of England that there was a "tragedy of horizons".

Then 'Labour Standards in Sustainability Rating: How well they incorporated?' Chaired by Elizabeth Umla.

John Jarrett from "FTSE for good" index explained how they did their ESG research and how core Labour standards from all companies are assessed including the supply chain.  Antti Savilaakso from MSCI admitted they have a somewhat similar method to FTSE. They have 130 analysis serving 900 clients. Their key issue is to decide whether bad company behaviour is a one off or structural?

Keeran Gwilliam-Beeharee from Vigeo said they do things differently. They start with the four core ILO standards. Governance issues are the best reported but Labour issues have a low coverage and there is decreasing information on it.

Mario Enrique Sanchez Richter, CCOO trade union economist spoke about his report on the sustainability of rating agencies and how well do they measure? His conclusion was that they do not measure very well.

Final speaker was  Brian Daley from ACTU who stated bluntly that he had not seen any evidence that Labour/Social ratings were actually used by fund managers or advisers to make buy or sell decisions.

In the Q&A Keeran responded to a question on why Labour issues are not being covered by saying that Governance issues such as corruption are seen as more important and lack of investor pressure.

I asked the panel whether rating agencies could give evidence of Companies with good Labour ratings having better long term performance? If they did this would this increase demand for such ratings? John replied that he was not aware of such evidence and agreed that Green and governance issues tended to "crowd out" Labour issues. Brian responded that we should be asking these questions and this should be at the heart of what trustees do.

The closing session was first a video from Liz Shuler, AFL-CIO & CWC co-chair on building an economy & retirement future that we can be proud of. Then final remarks from ITUC General Secretary Sharon Burrow, who said we want rights over our capital but we also want sustainability. While we respect workers in the carbon industry there will be no jobs in a dead planet.

Investor collaboration: LAPFF 2013

"Investor collaboration" is a bit of a buzz word in pensions lately. Nearly everyone seems to think it's "a good thing" although there is less agreement on the best way to bring it about.

First speaker was Daniel Godfry, CEO of the Investment Management Association. As recommended in the Kay review they have set up a "Collective engagement working group". They want to tackle the lack of long term thinking. 

Complete the circle between asset owners, asset managers and the companies themselves. The real objective for pension savers is not what happens in12 months but size of pot when they retire in 20 or 30 years. Long term sustainable investment should be a competitive advantage.

Janet Williamson from the TUC (and "Trade Union Share Owners") spoke about the increased interest by trade unions in shareholder activity (see full account of TUSO here at last months TUC Pension Network Conference). They aim to use trade union staff pensions funds to collaboratively support union values and speak with one voice, share costs and punch above their weight.  They also want to work with other like minded investors.

Next was Richard Nunn of United Reform Church and the Church Investment Group (CIG) which was set by by the Church of England and Methodist Church in 2010.   An early battle was with one of their major fund managers who didn't want to vote in accordance to their wishes in company elections with "pooled" investment funds.  They just made excuses why this couldn't be done even though many other managers did so.  They had to be embarrassed into doing the right thing. They now have 6 members and will soon have real time data and will be able to see what is being done on our behalf.

Final speaker was Amy Borrus, deputy director, of the US Council of Institutional Investors (CII).  Amy said that the UK leads the governance world. There are now 120 public, private and endowment funds in the CII.  50% are public sector pension funds. They concentrate on two main things - long term horizons and index investment. This drives their interest in governance. In 1980s they tried to deal with takeovers; in 1990s boardroom behaviour and oversight; 2000s expanded to financial regulatory reform as Encom and Worldcom proved to be massive corporate frauds. The financial crisis of 2007 was a failure of corporate governance.  The big public funds team up with activist managers. Annual elections for directors and transparent pay votes are very important.

Despite progress investors still have a long way to go. You still get in US "zombie directors" of companies despite not getting majority support of shareholders. You should have "one share, one vote" and the right to vote in proportion of shares you hold. An increasing number of new "Start up" companies have duel or even triple shares with different voting rights.

My question to panel was that this conference had heard in the last 2 days plenty of things that suggest something is rotten in the investment world and that can LAPFF on a voluntary basis look into joining like minded organisation such as TUSC or CIG for collaborative voting? This went down well with Janet and Richard. The chair of panel (and LAPFF) Cllr Kieran Quinn said that LAPFF would consider it as they would any proposal from a member.

most of pictures in collage @LAPFForum twitter

Stewardship - taking action: TUC Pension Network Conference 2013

Janet Williamson, TUC senior policy officer spoke at the first conference workshop on "Stewardship".

She started by saying the one "good" thing to come from the financial crisis is the recognition that shareholders were not engaged beforehand and may have even made the crisis worse.

The Stewardship code was first issued in July 2010 and revised in 2011. The Kay Review into similar issues took place in 2012. There has been an increase interest by unions in shareholder activity and the concept of "workers capital". UNISON started its capital stewardship programme in 2007. There was also a number of high profile union campaigns on private equity.This included Unite shareholder resolutions at the Tesco AGM in 2009 and by UNISON on Tar Sands.

There was a realisation that there was a gap between union values & their fund manager voting records and that there needs to be collaboration on voting and engagement by union staff pension funds.

This led to the formation of "Trade Union Share Owners" (TUSO) in March 2013 to constructively use the £1 billion plus of assets in trade union staff pension funds. 

TUSO has a clear policy on executive pay and will vote against any package that means a maximum of top & average employee pay in excess of 20:1.  As well as being against any other increases that are not offered to all workers in that company. TUSO guidelines also ask that all board appointments should be publicly advertised.

Each of the trade union funds have an equal vote and voice. So far they have worked well on a consensus basis. Each fund has an opt out. It is also not about stock selection or disinvestment.

TUSO next steps are to grow beyond founders UNISON, UNITE and the TUC to include all union funds. There is a cost for taking part and a £6k maximum fee and then a sliding scale according to size of fund.

In the Q&A I asked any trade union trustees present to contact their union to encourage them to participate in TUSO and that not only should we be working collectively with other unions staff funds but surely in the UK, unions should be providing pension schemes to members as they do in Australia and elsewhere!