PLSA, RPMI Railpen join research project on social factors

The collaboration comes ahead of the government’s consultation on the Consideration of social risks and opportunities by occupational pension schemes

The Pensions and Lifetime Savings Association (PLSA) and RPMI Railpen have teamed up with the Chartered Institute of Personnel and Development (CIPD) and think tank the High Pay Centre for a research project on social factors.

The aim of the project is to better understand investor expectations around social factors and explore how effectively the UK’s largest companies are discussing and responding to them within their workforces.

The collaboration comes ahead of the government’s consultation on the Consideration of social risks and opportunities by occupational pension schemes, which closes on 16 June.

Both sides of the company/investor dialogue will be brought together in the study, as the group members assess which workforce metrics are most valuable to investors and examine the annual reports of FTSE 100 companies.

The group will look at how well the UK’s biggest companies explain their employment models and practices in relation to company strategy in their annual reports.

It will focus on the disclosure of workforce composition, such as gender and ethnicity; stability of the workforce; skills and capabilities; and engagement and well-being.

Within these themes, metrics including aggregated turnover rate, the proportion of full- and part-time staff, employee share ownership, living wage accreditation and time lost to sickness and injuries, mental health sickness rates, gender and ethnicity pay gaps and age diversity of the workforce will also be under review.

The public policy team at the CIPD will lead the project, building on previous studies conducted by the PLSA, CIPD and the High Pay Centre that found investors’ interest on material workforce issues had not been translated into “consistent corporate reporting” and that, generally, blue chip companies still had “some way to go” to achieving best practice, despite some “notable good examples”.

RPMI Railpen will support the research with insights it has gained through company engagements, as its team have been questioning portfolio companies on their approach to looking after workers’ physical, mental and financial wellbeing since March 2020.

The PLSA and its members believe deeply in the responsible investment, commented PLSA deputy director, policy, Joe Dabrowski.

Companies that are able to demonstrate the highest standards for measuring workplace factors like remuneration practices, workforce composition, stability and skills are more likely to be well run and deliver higher returns for shareholders, he said.

This new research will uncover the extent to which UK companies are serious about doing the right thing and attracting long-term, responsible investors. This is especially relevant as we look to build back better following the disruption to employment and society at large during wrought by the pandemic, Dabrowski said.

RPMI Railpen senior investment manager, Caroline Escott, added: Railpen has been engaging on workforce treatment with portfolio companies for many years, both as a financially material issue and as a topic which resonates with our members.

She said: For instance, we were one of the first UK pension schemes to update our voting policy to reflect how we vote at companies where we do not think employees have been treated fairly. Covid-19 has shone a spotlight on the importance of an engaged, motivated and looked-after workforce to sustainable corporate success, and reignited the debate around what good workforce reporting looks like.