The UK's Department for Work and Pensions (DWP) asked the Taskforce on Social Factors to look at how social factors can be better incorporated into investment decisions. The taskforce’s draft report, aimed at pension fund trustees, included more than 30 recommendations aimed at companies and different parts of the investment chain. The CIPD has responded to the report to support the emphasis on social reporting and combatting modern slavery.
HR teams have a key role to play in influencing employment practices across the supply chain
The people profession has a key role to play ensuring companies tackle the threat of modern slavery proactively – a key focus of the taskforce’s report. This includes understanding the key people risks, the development of appropriate due diligence and policies, and the design of training. We will publish more specific recommendations for the people profession in 2024.
HR teams can also influence the employment practices of the organisation’s suppliers, for example by sharing best practice in recruitment, people management and development across the supply chain network.
Companies should report on a range of social factors and human capital indicators
We support clear, full and timely disclosures on social factors; particularly reporting on the gender and ethnicity pay gaps and internal pay ratios. We also support disclosure of human capital management key performance indicators, including workforce composition, workplace safety and standards, employee turnover, absenteeism rates, skills and capabilities, employee engagement, gender diversity and other useful indicators that help investors assess companies’ human capital management practices.
Reporting should focus on long-term success, not what’s easy to measure
In our recent responses to the International Sustainability Standards Board (ISSB) and the Department for Business & Trade, we emphasised the importance of social reporting as an important driver of productivity and growth in the economy. But much of the debate around reporting starts from what can easily be measured, rather than what is most material to long-term success.
We recommend that employers start focusing their reporting efforts on the area of skills development, which is the most likely driver of growth.
Read our responseDownload our letter to the taskforce members
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Read our recommended future agenda priorities for the International Sustainability Standards Board
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Learn about defining, measuring and reporting human capital, and how HR can use human capital information to drive performance