italyit
Engaging to improve labor practices in the post-Covid world

Engaging to improve labor practices in the post-Covid world

02-08-2021 | Visione
A new engagement program aims to improve workers’ rights and the poor labor conditions highlighted by Covid-19.
  • Laura Bosch Ferreté
    Laura
    Bosch Ferreté
    Engagement specialist

Speed read

  • Engagement with eight companies in retail, hospitality and the ‘gig economy’
  • Priorities focus on improving workers’ rights, wages and health and safety
  • Transparency levels and overall corporate governance also under spotlight

Robeco’s Active Ownership team has begun talks with eight companies in the retail and hospitality sectors and the wider ‘gig economy’ in Europe, North America and Asia. 

The gig economy is where workers do not have fixed-term contracts guaranteeing certain rights, such as paid holidays or health care, and has grown massively during the pandemic. It includes workers such as delivery drivers who are not salaried but paid by the hour.

“Covid-19 spurred shifts in behavior among consumers and businesses that are causing the greatest disruption in labor-intensive sectors,” says Engagement Specialist Laura Bosch. “Our engagement program will encourage companies in the retail, hospitality, and gig economy sectors to uphold robust labor practices and human capital management strategies.”

The team’s priorities will relate to seeking decent work and fundamental workers’ rights, such as social dialogue, wages and benefits and occupational health and safety. They will also look for strong human capital management strategies, including diversity and inclusion, human capital development and employee engagement. 

To ensure sufficient safeguards and corporate accountability on labor-related topics, the engagement will addresses companies’ overall transparency levels in reporting on issues and the governance structures they have in place to deal with them. 

Scopri gli ultimi approfondimenti in tema di sostenibilità
Scopri gli ultimi approfondimenti in tema di sostenibilità
Abbonati

Six objectives

While many of these issues were present prior to the pandemic, they were made worse as people were forced to work from home, switching to online shopping and meal delivery during the lockdowns. This gives rise to six engagement objectives that the team will be pursuing, as shown in the graphic below:

“Covid-19 has brought labor practices in labor-intensive sectors under the magnifying glass,” says Bosch. “On the one side, sectors such as e-commerce and the online food delivery sector have grown two to five times faster than before the pandemic. The booming demand has highlighted the controversial working contracts defining gig work in the online food delivery sector and has shone light on the high-pressure work environment of food retail and e-commerce companies.”

“On the other side of the spectrum, the hotel industry has been facing a business crisis due to the social mobility restrictions imposed throughout the pandemic. Although sporadic demand, rapid-fire recruitment and retrenchment of staff have always been part of the hotel industry, the Covid-19 pandemic has amplified these previously hidden issues as workers struggled to secure an income whilst hotels remained closed.”

“The growing social pressures, regulatory changes, and trends towards increasing automation, have caught the attention of investors. Inadequate labor management can not only expose businesses to legal, operational, and reputational risks, but if improved can also strengthen companies’ competitive advantage in a post-Covid-19 world.”

Double materiality

Bosch says poor labor practices are an issue of ‘double materiality’ for investors. “The systemic perspective focuses on the impact a company’s activities have on the environmental and social well-being that can affect the real economy and subsequently the financial markets,” she says. “Meanwhile, the business perspective examines the impact environmental and social issues can have on a company’s valuation through adjustments of the value drivers.”

The impact that Covid-19 has had on the market cannot be underestimated; aside from the global disruption to trade and normal living, the International Labor Organization estimates that 144 million jobs were lost at the height of the pandemic. 

Global labor income declined by 8.3% in 2020 relative to 2019, and most job losses were among more vulnerable workers who could not afford to lose all or part of their livelihoods.

Global employment (in billions) and jobs lost (in millions) in the pandemic. Source: International Labor Organization, COVID-19 and the world of work. Seventh edition, 2021.

“The 2020 labor market disruption far exceeded the impact of the global financial crisis of 2009,” says Bosch. “Covid-19 emphasized the importance of businesses’ social license to operate given the vulnerability and precarious employment status of some workers, exposing a prevalent lack of adequate safeguards necessary to protect workers and enforce their labor rights in times of hardship.”

Targeting the gig economy

“For the gig economy, which offers flexible, temporary, or freelance jobs through online platforms, Covid-19 has emphasized weaknesses in the current set-up. During the pandemic, food delivery apps experienced a sharp increase in demand, nearly doubling their revenues  and leading to an increased need for gig workers.”

“Many of these gig delivery workers have been particularly exposed to occupational health and safety risks, due to low means of protective equipment, while having minimal access to paid sick leave and health care.”

“The challenge with the gig economy is that many workers are in desperate need for an income to provide for their families and thus accept low salaries and poor working conditions.”

“Our engagement program therefore focuses on protecting workers’ rights and upholding appropriate labor practices in labor intensive sectors, targeting those sectors that have experienced a massive disruption in their operations due to the pandemic.” 

Logo

Disclaimer

Confermo di essere un cliente professionale

Le informazioni e le opinioni contenute in questa sezione del Sito cui sta accedendo sono destinate esclusivamente a Clienti Professionali come definiti dal Regolamento Consob n. 16190 del 29 ottobre 2007 (articolo 26 e Allegato 3) e dalla Direttiva CE n. 2004/39 (Allegato II), e sono concepite ad uso esclusivo di tali categorie di soggetti. Ne è vietata la divulgazione, anche solo parziale.

Al fine di accedere a tale sezione riservata, si prega di confermare di essere un  Cliente Professionale, declinando Robeco qualsivoglia responsabilità in caso di accesso effettuato da una persona che non sia un cliente professionale.

In ogni caso, le informazioni e le opinioni ivi contenute non costituiscono un'offerta o una sollecitazione all'investimento e non costituiscono una raccomandazione o consiglio, anche di carattere fiscale, o un'offerta, finalizzate all'investimento, e non devono in alcun caso essere interpretate come tali.

Prima di  ogni investimento, per una descrizione dettagliata delle caratteristiche, dei rischi e degli oneri connessi, si raccomanda di esaminare il Prospetto, i KIIDs delle classi autorizzate per la commercializzazione in Italia, la relazione annuale o semestrale e lo Statuto, disponibili sul presente Sito o presso i collocatori.
L’investimento in prodotti finanziari è soggetto a fluttuazioni, con conseguente variazione al rialzo o al ribasso dei prezzi, ed è possibile che non si riesca a recuperare l'importo originariamente investito.

Rifiuto