Bridgepoint, Care UK and is it "good business practice" to pay poverty wages?

Last week UNISON Strikers from Care UK in Doncaster tried to lobby the owners of their company, £8.7 Billion Private Equity firm Bridgepoint Capital.

Care UK won the contract to run former NHS care services in Doncaster. The strikers are trying to get a decent pay rise (following savage cuts in their pay and conditions -up to 35% of pay for some staff) and also a living wage for all new employees.

In the light of such questionable employment practices I  wondered what the Bridgepoint's stated policy is on ethical investment issues? I found here that apparently "We believe that it's good business practice to have strong environmental, social and corporate governance (ESG) principles - and that building these principles into our business practises is good for our investors, employees, investee companies and their stakeholders in the long term.  Our approach is led by our core values, which we expect our teams to adhere to in the way they conduct themselves and represent Bridgepoint - and wherever relevant, in our environmental, social and governance policies".

also here I read that Bridgepoint "works with management teams to implement appropriate social policies in their operations and procedures. Typically, these focus on worker health and safety, labour rights and welfare". Oh, they are also "a signatory to the United Nations' Principles for Responsible Investment"

hmmmm - what twaddle. How can slashing wages and making its workers broke and homeless be "good business practice"? How in these circumstances do they "focus on worker health & safety, labour rights and welfare". What hypocrisy.

Of course companies that treat their workers like rubbish also treat their clients as rubbish as well.

Check out UNISON news here and Observer article here

Finally, I am willing to bet that a number of pension and insurance funds invest in Bridgepoint. Do you really want your retirement funded by exploitation and misery?

The “Worse” Big Pension Schemes in UK

FairPensions have published their latest survey (league table) on responsible investment for the top 30 British pension schemes. These schemes have nearly 5 million members and an estimated £351 billion of asserts.

The performance of the bottom 10 appears to be pretty awful. Check out the FairPensions website which “names and shames”.

As a UNISON pension activist I am particularly concerned that the Transport for London (TFL )scheme is apparently joint 19th out of 30 while the E.ON electricity scheme is 25th!

It is noticeable that the top schemes are usually signatories to the UNPRI while from 11th-30th they are all non-signatories.

This is all serious stuff since we need to make sure that all our pension schemes are run in a responsible and transparent manner.

Bank pension schemes (now mainly owned by the government) have also performed relatively badly. No great surprise there I suppose.

It is simply wrong that the bottom 5 schemes did not participate in the survey (see below). FairPensions is an established player in the governance field who should have been treated with respect. The question will be asked rightly or wrongly - what have these pension schemes got to hide (apart from poor governance)?

Coal Pension Trustees Pension Schemes
IBM Pension Scheme
Unilever UK Pension Fund
BAe Systems Pension Scheme
Lloyds TSB Group plc Group Pension Scheme

Responsible Investment Trustee Training

On Monday I went to a training day organised by the TUC and “Fair Pensions” at Congress House. This course was a “pilot” but it was encouraging that the 25 places were oversubscribed and a waiting list had to be set up. Sign of our troubled times? It was designed for trade union member nominated pension trustees and representatives. There was a good mixture of people from a range of trade unions and pension funds.

There was a series of presentations and workshops. On “busting myths about responsible investment”; “Effective Investor Engagement” (David Pitt-Watson author of the “The New Capitalists”), “Why Funds should collaborate in their Mutual Interest” (UNPRI); Asking Questions as a Trustee: How to do it effectively? And “Making headway on RI: practical ideas for implementation” (By Bernie Doeser and Catherine Howarth of Fair Pensions).

I’ll hopefully come back and in more detail on some of them another time.

Some key issues from the day (in my view) –

Don’t confuse “Responsible investment” with “Ethical investment”.

Major UK asset manager Credit Suisse had a Fair Pensions responsible investment score in 2008 of only 1 out of a possible 36 (bottom of list).

“We can all see what irresponsible investment has done to our funds”...Who could argue with a (do no harm to the wider financial system) clause in your statement of investment principles...what fund manager is going to argue that their decisions will cause harm? (David Pitt-Watson).

It costs nothing to be a UNPRI signatory (a donation is of course welcome). So why is your Pension fund or fund manager not a signatory?

Ask your fund managers (and importantly - potential ones at “beauty parades”) how many staff they have working 100% on responsible investment issues?

The over emphasis on short term 3 monthly fund performance by Pension funds has contributed to the present financial crisis.

Organise, organise and organise. Ironically, basic trade union organising values are as necessary to the effective Capital Stewardship of pension investments as in any bargaining issue. Survey your members, involve them and find out what they think? Report back regularly. Make sure that representatives are properly trained and supported by the union; make sure they have sufficient time off to properly read papers, research and plan. Work with your fellow trustees. Try to win things that are achievable.

Most importantly of all, believe absolutely and utterly that:

1. What you are doing will change things, and at the very least you will help get rid of child labour, environmental damage, overpaid executives, public corruption and unjust or unsafe Labour conditions.

2. Responsible long term investments will enhance the value of your funds and outperform rivals.