The Pivotal Role of Investors in Worker Financial Security: Expanding ESG Analysis to Include Financial Well-Being
Commonwealth recently released a paper on The Pivotal Role of Investors in Worker Financial Security: Expanding ESG Analysis to Include Financial Well-Being. The report was coauthored with Katherine Collins and Stephanie Dobson of the Sustainable Investing Team at Putnam Investments.
Among the paper's key findings:
Worker financial security is material to business performance; research links financial insecurity to decreased productivity, increased absenteeism and turnover, and increased workplace accidents.
LMI workers' financial security needs are unmet and addressing them promises high return on investment; firms and investors should prioritize these lower-income workers' financial security.
It's more than just wages; when ESG analysis includes Social ("S") factors, too often the focus is just on wages - in fact, adequate wages are necessary but insufficient to achieve worker financial security (and the resulting impact on firm and investment performance).
Best practices for worker financial security exist; firms should offer robust, well designed financial benefits, and track their impact on workers and the bottom line; Investors should engage firms on the issue, encourage action, support corporate disclosures, and emphasize the materiality of the issue to firm performance.
To access a copy of the report, please visit the Commonwealth website here.