USA: Investors launch principles addressing sexual harassment and workplace misconduct

Author: Paul Hodgson, Responsible-Investor.com, Published on: 16 January 2019

January 15th, 2019

Trustees at CalPERS, CalSTRS, the Los Angeles City Employees’ Retirement System and the Los Angeles County Employees’ Retirement Association, which together have combined assets of more than $635bn (€555bn), have come together to create the Trustees United Principles. The principles seek to “ensure portfolio companies are working toward providing workplace cultures and environments that are safe, free of sexual harassment, violence and misconduct”. They focus on human capital management strategies that should help reduce future risks in light of their need for long-term value creation…it focuses on “opportunities to create long-term value that have been missed” because companies have allowed sexual harassment and misconduct to occur that has damaged corporate culture…“Those subject to sexual harassment and misconduct in the workplace are less likely to be productive, their morale will be lower, their ability to be engaged with and represent the company is likely to be hampered. Plus, you see increased absenteeism, and impacts on retention and recruitment. And from the consumer standpoint, a significant scandal can have an important impact on brand loyalty. We have to care about this as investors.” The trustees recognise that the wave of sexual harassment and misconduct reports open companies up to “significant operational, financial and reputational risks”. This has forced a focus on surrounding issues as well, such as gender, racial and ethnic diversity…“This is a joint assertion that trustees and investors alike have a stake in engaging companies to promote policies that reduce incidents of sexual harassment, violence and misconduct and provide safe, supportive, and productive workplaces.”

 

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