The Global Unions’ Committee on Workers’ Capital (CWC) is committed to the proper stewardship of the trillions in retirement savings that are invested for the benefit of union members and all working people. The effective stewardship of retirement savings requires that fiduciaries consider all relevant investment risks, including environmental, social and governance (ESG) factors. Effective stewardship includes upholding responsibilities to prevent and mitigate adverse labour rights impacts under international norms and frameworks as well as providing appropriate remedy. In 2025, the CWC will hold the largest global asset managers, along with private market managers, to account for their labour rights stewardship, provide educational opportunities for investors on responsible workforce management and fundamental labour rights, and increase its visibility and impact in policy and regulatory processes.
Asset manager accountability
The CWC is concerned with concentration in the management of workers’ retirement savings among a small number of global asset managers. In the past two decades, assets under management by the top 5 global asset managers have grown from less than half of the assets held by the world’s largest 300 pension plans to 125 percent. This concentration of assets gives these global asset managers tremendous influence in shaping company practices and policies.
As these asset managers have faced increasing anti-ESG backlash from right-wing politicians in the US, they have regrettably watered down their commitments to proxy voting and engagement to uphold fundamental labour rights and mitigate ESG risks. The roll back of these ESG commitments has had ripple effects around the globe. Many managers are responding to the ESG backlash by providing clients with more choice around ESG commitments to please all sides. This poses questions as to the extent to which ESG issues are integrated in default investment products.
The CWC will step up its efforts to ensure that global asset managers provide baseline stewardship policies and practices that respect and uphold internationally recognized human rights norms and frameworks, especially the ILO Fundamental Principles and Rights at Work and other international labour standards, the UN Guiding Principles for Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. The CWC will assist workers’ retirement funds and other like-minded asset owners to hold their investment managers accountable on their stated commitment to human and labour rights.
Private market Investments
Private market investments in asset classes like infrastructure, real estate, private debt and private equity have also gained clout and power in the economy. Private market assets reached USD 13.1 trillion globally in 2023. Private market asset managers wield growing control over companies and the lives of working people in many industries including healthcare, manufacturing, retail and food processing. In the US alone, the private equity industry employs over 12 million people.
Private market investors hold sizeable – often majority – stakes in given assets and wield important influence in operational and managerial control of companies, compared to the average public equity investor.
The CWC will step up the quality of its engagement and bring more workers’ capital power to the table to promote increased transparency, adherence to labour standards and accountability toward end beneficiaries in private market investments.
Labour Rights Investor Network
Despite the anti-ESG backlash in the US, the shift towards mandatory human rights due diligence in the EU has reinforced that human rights are a material concern for investors. The CWC created the Labour Rights Investor Network (LRIN) to support improved labour rights stewardship. The LRIN educates investors on how to engage with companies to mitigate adverse labour rights impacts such as union avoidance and unsafe workplaces. Since its launch in late 2023, the LRIN has grown to a network of over 45 institutions representing more than USD 3.6 trillion in combined assets. These LRIN members have signed a statement affirming their commitment to respect freedom of association and collective bargaining in the stewardship of their investment portfolios.
The CWC will step up efforts to sign on additional owners and managers of workers’ capital to the LRIN.
Conclusion
We reiterate our commitment to ensuring that workers’ capital be invested in a way that upholds workers’ rights. The key trends shaping how workers’ capital impacts workers’ rights include the concentration of assets among a smaller number of global asset managers, the rise of private market investments and the codification of human rights due diligence in some jurisdictions.
In 2025, we will scale up our impact by convening asset owners from around the world to hold managers accountable on ESG stewardship practices and responsibilities under international human rights frameworks, we will promote transparency, strong labour standards, and accountability in private markets, and we will foster increased participation in initiatives that bring investors closer to the realities and needs of working people. We will also increase our visibility and impact in policy and regulatory processes to ensure labour rights, reduce inequality and promote a just transition.
