The pandemic has accelerated focus on a company’s social impact. It exposed fissures in the social fabric of society. Women, ethnic minorities, and low-paid workers suffered disproportionately in the fallout from economic lockdowns, while certain segments of society saw higher serious illness and mortality. This galvanised social movements, such as Black Lives Matter, but also saw a renewed focus on well-being and mental health from governments and the corporate sector.
Reporting and measurement remains the trickiest area in building social criteria into a portfolio. It is relatively easy to track and measure carbon output, or plastics, but objective benchmarks for areas such as employee well-being are more difficult. There are multiple frameworks and some disagreement over the criteria. This means it is difficult to compare data or achieve an objective judgement of a company’s performance.
Nevertheless, policymakers and corporates are starting to work out new ways to disclose and compare social metrics. The UN Sustainable Development Goals have generally been used as a starting point. There are three main SDGs that map specifically to social factors: SDG 3, 5 and 8. It is here that many charities are focusing most of their attention.
SDG 3 focuses on ensuring healthy lives and “promoting well-being for all at all ages”. This includes areas such as reducing maternal mortality and addressing preventable deaths in children. It strives to tackle epidemics, such as AIDS, tuberculosis and malaria. It also seeks to address mental health and well-being, including the prevention and treatment of substance abuse.
SDG 5 covers gender equality. The UN says: “It is not just a human rights issue; it is a tremendous waste of the world’s human potential. By denying women equal rights, we deny half the population a chance to live life at its fullest. Political, economic and social equality for women will benefit all the world’s citizens. Together we can eradicate prejudice and work for equal rights and respect for all.”
SDG 8 is a broad category, encompassing sustainable growth and equal pay, to full employment and ‘decent’ work. It covers universal banking, youth employment, training, labour rights and safe working environments. It also looks to achieve higher levels of productivity through diversification, technological upgrading and innovation, plus a greater focus on high value-added and labour-intensive sectors.
Even though these goals were originally designed for countries rather than corporates, they are being adapted to fit. More recently, the Sustainability Accounting Standards Board (SASB) has mapped accounting rules to the SDGs, so the two sides are coming together.
The EU has drafted a social taxonomy, designed to build on the environmental one already agreed by member states. This new taxonomy will take time to be approved but is reasonably well-advanced. It considers both the contribution made to social goals from products and services sold by companies, along with the contribution made by the manufacturing process or supply chain. This is vitally important. There is no merit in making socially responsible products from exploitative practices.
At the same time, human capital and diversity disclosures are gaining momentum. Increasingly, investors demand details of gender pay gaps and board diversity and are willing to vote against boards who score poorly. Furthermore, the UK has made it compulsory for companies with more than 250 employees to publish their gender pay gap.
The European Commission is now increasing its consideration on gender. In March 2021, it published a set of pay transparency measures, compelling member states to force reporting requirements on companies with more than 250 employees. Companies will also need to provide all workers with the right to see colleagues’ salaries.
The capitalist system is being redesigned and investors need to stay on the right side of that change. For the time being measurement is poor and inconsistent, but standards are being established. For charities, it is vitally important to start using social metrics and learning from the outcomes, not as a hard and fast measure but as good starting point for further investigation.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. Details correct at time of writing.
Investment does involve risk. The value of investments and the income from them can go down as well as up. The investor may not receive back, in total, the original amount invested. Past performance is not a guide to future performance. Please note that some ethical funds may, by definition, have a limited investment universe; this may affect performance. Clients should always seek appropriate advice from their financial adviser before committing funds for investment.
Issued by Evelyn Partners Investment Management LLP, authorised and regulated by the Financial Conduct Authority
Janga hilo limeongeza mwelekeo wa kuzingatia athari za kijamii za kampuni. Ilichunguza mipasuko katika muundo wa kijamii wa jamii. Wanawake, watu wa makabila madogo na wafanyakazi wenye mishahara ya chini walipatwa na athari kubwa za kufungwa kwa uchumi, wakati sehemu fulani za jamii ziliona magonjwa makubwa na vifo vyao. Hii ilichochea harakati za kijamii, kama vile Black Lives Matter, lakini pia iliona mwelekeo mpya wa ustawi na afya ya akili kutoka kwa serikali na sekta ya ushirika. Ripoti na kipimo bado ni eneo gumu zaidi katika kujenga vigezo vya kijamii katika kwingineko. Ni rahisi kufuatilia na kupima uzalishaji wa kaboni, au plastiki, lakini vigezo vya lengo kwa maeneo kama vile ustawi wa wafanyikazi ni ngumu zaidi. Kuna mifumo mingi na baadhi ya kutokubaliana juu ya vigezo. Hii ina maana ni vigumu kulinganisha data au kufikia uamuzi wa lengo la utendaji wa kampuni. Hata hivyo, watunga sera na makampuni yanaanza kufanya kazi njia mpya za kufichua na kulinganisha vipimo vya kijamii. Malengo ya Maendeleo ya Maendeleo ya Umoja wa Mataifa kwa ujumla yametumiwa kama hatua ya kuanzia. Mifano mitatu ya SDG ni muhimu kwa ajili ya maendeleo ya kijamii: SDG 3 na SDG 5. Ni hapa ambapo mashirika mengi ya kutoa misaada yanakazia fikira zao nyingi. SDG 3 inazingatia kuhakikisha maisha yenye afya na <unk> kukuza ustawi kwa wote katika umri wote <unk>. Hii inajumuisha maeneo kama vile kupunguza vifo vya mama na kushughulikia vifo vinavyoweza kuepukwa katika watoto. Inajitahidi kukabiliana na magonjwa ya kuambukiza, kama vile Ukimwi, kifua kikuu na malaria. Pia inatafuta kushughulikia afya ya akili na ustawi, ikiwa ni pamoja na kuzuia na matibabu ya matumizi mabaya ya dawa. Lengo la 5 la SDG ni kuimarisha usawa wa kijinsia. Umoja wa Mataifa unasema: "Si suala la haki za binadamu tu; ni upotezaji mkubwa wa uwezo wa kibinadamu wa ulimwengu. Kwa kuwazuia wanawake kupata haki sawa, tunakataa nusu ya watu nafasi ya kuishi maisha yao kwa ukamilifu. Usawa wa kisiasa, kiuchumi na kijamii kwa wanawake utafaidi raia wote wa dunia. Pamoja tunaweza kuondoa ubaguzi na kufanya kazi kwa haki sawa na heshima kwa wote. <unk> SDG 8 ni jamii pana, inayojumuisha ukuaji endelevu na mshahara sawa, kwa ajira kamili na kazi ya "mwenye heshima". Inashughulikia benki ya ulimwengu, ajira ya vijana, mafunzo, haki za kazi na mazingira salama ya kazi. Pia inatafuta kufikia viwango vya juu vya uzalishaji kupitia utofauti, uboreshaji wa kiteknolojia na uvumbuzi, pamoja na kuzingatia zaidi sekta zenye thamani ya juu na nguvu za kazi. Ingawa malengo haya awali yaliundwa kwa nchi badala ya makampuni, yanabadilishwa ili yafanane. Kwa mfano, Bodi ya Viwango vya Uhasibu wa Uendelevu (SASB) imeweka sheria za uhasibu kwenye SDGs, na kwa hivyo, ni muhimu sana kuunganisha viwango vya uhasibu na viwango vya uhasibu. EU imepanga taxonomy ya kijamii, iliyoundwa kujenga juu ya moja ya mazingira tayari kukubaliwa na nchi wanachama. Taxonomy hii mpya itachukua muda ili kuidhinishwa lakini ni busara vizuri maendeleo. Inazingatia mchango uliofanywa kwa malengo ya kijamii kutoka kwa bidhaa na huduma zinazouzwa na kampuni, pamoja na mchango uliofanywa na mchakato wa utengenezaji au mlolongo wa usambazaji. Hilo ni jambo la maana sana. Hakuna faida ya kutengeneza bidhaa zenye uwajibikaji wa kijamii kutokana na mazoea ya unyonyaji. Wakati huo huo, mtaji wa binadamu na ufunuo wa utofauti unapata kasi. "Wekezaji wanahitaji maelezo zaidi juu ya tofauti za malipo ya jinsia na utofauti wa bodi na wako tayari kupiga kura dhidi ya bodi ambazo zina alama mbaya. """ Uingereza imeweka sheria ya kulazimisha makampuni yenye wafanyakazi zaidi ya 250 kuchapisha tofauti ya malipo ya jinsia. Tume ya Ulaya sasa inaongeza kuzingatia kwake juu ya jinsia. Mwezi Machi 2021, ilichapisha seti ya hatua za uwazi wa mshahara, ikiwalazimisha nchi wanachama kulazimisha mahitaji ya kuripoti kwa kampuni zilizo na wafanyikazi zaidi ya 250. Kampuni pia itahitaji kutoa wafanyakazi wote na haki ya kuona wafanyakazi wenzake mishahara. Mfumo wa ubepari unabadilishwa na wawekezaji wanahitaji kukaa upande wa haki wa mabadiliko hayo. Kwa sasa kipimo ni duni na inconsistent, lakini viwango ni kuanzishwa. Kwa misaada, ni muhimu sana kuanza kutumia vipimo vya kijamii na kujifunza kutoka kwa matokeo, sio kama kipimo kigumu na cha haraka lakini kama hatua nzuri ya kuanza kwa uchunguzi zaidi. Kwa lazima, taarifa hii inaweza tu kutoa muhtasari mfupi na ni muhimu kutafuta ushauri wa kitaalamu kabla ya kutumia maudhui ya makala hii. Taarifa hii si ushauri wala mapendekezo yanayohusiana na ununuzi au uhamisho wa uwekezaji. Maelezo sahihi wakati wa kuandika. Uwekezaji huhusisha hatari. Thamani ya uwekezaji na mapato kutoka kwao yanaweza kushuka na pia kuongezeka. Mwekezaji hawezi kupokea nyuma, kwa jumla, kiasi cha awali kuwekeza. Utendaji wa zamani si mwongozo wa utendaji wa wakati ujao. Tafadhali kumbuka kwamba baadhi ya fedha za maadili inaweza, kwa ufafanuzi, kuwa na ulimwengu mdogo wa uwekezaji; hii inaweza kuathiri utendaji. Wateja wanapaswa daima kutafuta ushauri sahihi kutoka kwa mshauri wao wa kifedha kabla ya kujitolea fedha kwa ajili ya uwekezaji. Evelyn Partners Investment Management Ltd. ina mamlaka na inasimamiwa na Mamlaka ya Utendaji wa Fedha.