October 22, 2024 by Liz Umlas (Senior Fellow)

Earlier this month I spoke at two events in Toronto in my capacity as senior advisor to IndustriALL Global Union: the annual conference of the Committee on Workers’ Capital (CWC) and PRI in Person 2024. The CWC works with trade unions and union-nominated pension fund trustees to ensure workers’ retirement money is invested in ways that advance labor rights rather than undermine them. Through their retirement savings, workers hold a significant amount of capital across multiple asset classes: according to the CWC, in 2021 pension fund assets across the globe totaled $38.5 trillion.

CWC’s annual conference is an opportunity for its members and others to discuss relevant issues at the intersection of labor and investment. As several sessions underscored, trade unions and their nominated pension fund trustees have the ability, through their investment decisions, to change corporate behavior. This year’s gathering explored, among other things, shared lessons from engaging large companies; the outsized power of private equity and how the industry might be influenced for the good of society; and how asset owners can hold their asset managers accountable for their decisions and actions.

The UN PRI encourages active stewardship and incorporation of ESG (environmental, social and governance) factors into signatory members’ investment and ownership decisions. Its annual conference this year attracted about 1,700 participants, mostly from investment and finance but also from civil society, academia and other sectors. In 2022, the PRI launched a dedicated human rights-related initiative, PRI Advance, intended to improve human rights practices at companies in two pilot industries (mining and metals, and renewable energy).

The panel on which I spoke looked at the first two years of the PRI Advance initiative and underscored the fundamental importance of investors engaging rights-holders directly rather than relying only on company reporting to evaluate ESG performance.

Much lip service is given in business and investment circles to “stakeholder engagement”, and emerging laws require companies to carry it out as part of their human rights due diligence. But what it actually means – that is, what is meaningful engagement from the perspective of rights-holders affected by corporate activity – calls for much more systematic exploration.