Identifying the workforce disclosure investors need

Information on workforce composition, safety training should be readily available

While the impacts of workplace accidents fall most heavily on the workers, their co-workers and their families, workplace accidents also have financial implications for companies from fines, legal liability, work stoppages, closures and brand damage. At the same time, strong safety management can positively influence a company’s competitiveness and financial performance. Because of these financial implications, along with broader commitments to responsible investment and protecting workers’ rights, investors are interested in getting a better picture of companies’ health and safety management processes and performance.


However, the safety indicators that are most commonly reported by companies such as accident rates and fatalities tell us only the end results of poor workforce management, not the signs of a decent work culture. In order to evaluate a company’s approach to safety, investors need a broader range of indicators. Of particular importance is the composition of the company’s workforce and whether adequate safety training is being provided to all workers in the workplace, including temporary workers.


Unfortunately, trying to find this information in companies’ public reporting can be challenging. In a recent analysis of the public disclosures of ten consumer product manufacturing companies, the Shareholder Association for Research & Education (SHARE) found fairly strong disclosure of company policies related to health and safety, but little information about workforce composition. 


For example, only one company of the 10 that were analyzed disclosed information on the number of people employed through temporary agencies, franchises and/or independent contractors. Information on the degree of reliance on temporary workers can provide useful insights into OHS risks based on evidence that temporary workers suffer higher rates of occupational injuries than permanent employees.


Analysis of workers’ compensation claims in the United States, for example, found that temporary agency workers had higher injury claim rates than those in standard work arrangements, with double the rates in manufacturing. One reason cited for these higher injury rates is that temporary workers do not receive adequate training. Often, temporary agencies provide only generic, basic training before sending workers to a site and many do not receive any on-site training.


Only four of the companies analyzed in SHARE’s study provided information on their OHS management systems including the number of hours of safety training provided. However, even for those companies that do publicly disclose information on training hours, the data provided is usually related to training for employees and does not reflect training for temporary workers.


In the context of radically changing employment relationships, including the growth in temporary work in Canada, investors require disclosure beyond traditional safety metrics related to direct employees. These safety metrics, while critical, must be supplemented with disclosure that sheds light on the company’s entire employment footprint including the composition of the workforce (full-time and part-time employees, temporary workers and contract workers) and the level of training provided to both employees and other categories of contingent workers.


Recognizing the need for this kind of information, a group of over 100 global investors with approximately $10 trillion in assets under management are calling on companies to respond to a new Workforce Disclosure Initiative (WDI). Several hundred global companies are being asked to respond to the WDI survey, which seeks better quality and more standardized data across company employment footprints including, among other things, their use of part-time, temporary and contract workers.

SHARE is leading the effort in Canada and actively seeking responses from a sample group of Canadian companies. The ultimate goal is to improve the quality of jobs and safety of workers in the direct operations and supply chains of multinational corporations.