annual review indst 2024 public - Flipbook - Side 11
Annual Review 2024
Human capital
We are intensifying our engagement on upskilling and reskilling
workers amid anxiety about a just transition to a low carbon
economy, negative AI impacts from redundancies, and potential
bias in hiring. We are also seeing continuing issues around the
cost of living driving renewed interest in collective bargaining.
We will maintain our focus on inclusion and representation,
asking companies to develop a strategy and action plan to
close the ethnicity pay gap and achieve proportionate ethnic
and gender representation at all levels. We will also challenge
companies to consider an expanded range of inclusion metrics
beyond representation. These include those related to
employee engagement and a sense of belonging, upskilling
and advancement, and pay gaps3 for different groups.
As we outlined in our white paper on biodiversity, published
in February 2021,4 we encourage companies to identify, assess
and measure their impacts and dependencies on biodiversity
and ecosystem services, in line with the 2023 Taskforce on
Nature-related Financial Disclosures (TNFD)5 recommendations,
and then to develop strategies and targets to address the
most material risks. We will continue to work with investor
coalitions such as the Rainforest Alliance,6 the PRI’s Spring
initiative7 and Nature Action 1008 to bring added weight to
engagements with affected companies.
Our engagement on health and safety is extending to
encompass mitigating climate-related risks in the workplace,
such as heat stress. It will continue to focus on mental
wellbeing and actions to halt sexual harassment.
Expanding themes
In addition to the above priority themes, we will intensify
our engagement on two rapidly evolving topics in 2025:
Nature and biodiversity
We ask companies to address marine and terrestrial biodiversity
loss across their value chains, in line with the COP15 mission to
halt and reverse biodiversity loss by 2030. COP16 made historic
strides in recognising the role of indigenous and local
communities in biodiversity conservation, but challenges remain
in securing the necessary funding, and the monitoring
mechanisms to achieve global biodiversity targets.
The production and selling of food will remain a priority for
engagement, alongside other sectors with significant impacts,
such as mining and agrochemicals. We ask companies to
reduce their impacts on biodiversity across the value chain,
and aim for a net-positive impact on biodiversity as best
practice. Depending on the specific company context,
engagement will cover deforestation, water stress,
regenerative agriculture, infectious diseases and
antimicrobial resistance (AMR), sustainable proteins
and chemical runoff management.
Digital rights and AI
We will continue to engage companies on our Digital Rights
Principles,9 which outline the responsible development and
deployment of AI. These will be updated in 2025 to
encompass the latest concerns, issues and opportunities.
We engage companies on negative societal impacts,
including problematic content on social media, reinforcement
of unintended bias, and health and safety impacts on children
and young people.
We encourage companies to balance freedom of expression
with their obligations to remove problematic content and
respect privacy rights online. Ensuring that the appropriate
controls are in place is becoming critical, particularly with
rising concern over the use of social media to spread
misinformation and disinformation. This is driving a lack of
trust in traditional media outlets. Cybersecurity, and concerns
over the use and impact of AI, are also rising up the agenda.
Although AI is creating new opportunities for companies, it
also brings the potential for workforce disruption, regulatory
infraction or reputational damage, and we will be engaging
with companies on how they mitigate these risks.
In addition to these themes, we maintain a comprehensive
engagement plan covering a broad range of other issues.
These include responsible tax practices, increasing
resource efficiency through the circular economy, reducing
harmful pollution, and seeking positive wider societal
outcomes through increased corporate responsibility.
3
Race, Gender, and LGBTQ+ wage gaps are real – and they end up costing us all | DiversityJobs.com.
Our commitment to nature | Federated Hermes Limited.
5
The Taskforce on Nature-related Financial Disclosures.
6
About | Rainforest Alliance (rainforest-alliance.org).
7
PRI | Spring (unpri.org).
8
Nature Action 100 – Supporting greater corporate ambition and action on tackling nature and biodiversity loss.
9
EOS Digital Rights Principles.
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