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Trade Unions Set Expectations for Asset Managers on Fundamental Labour Rights

13 July 2022

The Global Unions’ Committee on Workers’ Capital (CWC) published its Baseline Expectations for Asset Managers on Fundamental Labour Rights (“CWC Baseline Expectations”). Developed by trade unions and pension fund board members as part of CWC’s Asset Manager Accountability Initiative, the CWC Baseline Expectations will help asset owners hold their contracted asset managers accountable to clear expectations for fundamental labour rights.

Global asset managers invest capital on behalf of workers’ retirement savings funds. Pension fund trustees who sit on the boards of these funds and participate in the CWC network expect that their managers will uphold their responsibilities to mitigate adverse labour rights impacts in their investments.

TUAC observes a critical gap in implementing constructive industrial relations across the OECD.  Institutional investors inconsistently hold investee enterprises accountable to the OECD standards for international business.  With this new tool, asset owners will be able to identify asset managers that set a higher standard for responsible investment.

The CWC Baseline Expectations progress from “baseline” into “good practices” and are divided in four categories from which to assess an asset manager’s level of commitment to respecting and upholding fundamental labour rights:

  1. Stewardship framework;
  2. Stewardship practices in public equities (proxy voting and shareholder engagement);
  3. Stewardship practices in private markets; and
  4. Policy advocacy

The framework is anchored in the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises which lay out investor responsibilities to carry out due diligence and prevent or mitigate adverse environmental and social impacts.

The CWC Baseline Expectations were developed collaboratively by trade union officials and pension fund trustees affiliated to unions, including: the Australian Council of Trade Unions (Australia), AFL-CIO (USA), Comisiones Obreras (Spain), FNV (Netherlands), the International Trade Union Confederation, UNI Global Union, the International Transport Workers’ Federation and the Trade Union Advisory Committee to the OECD (TUAC).