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Our Director of Investor Stewardship speaks about the origins and purpose of our newly launched Inequality Stewardship Plan.
UPP recently published our Inequality Stewardship Plan (ISP), aimed at addressing inequality within our investment portfolio. The plan focuses on two key commitments: promoting decent work standards as set out in the International Labour Organization (ILO) Fundamental Principles and Rights at Work and curbing excessive executive compensation. By tackling inequality in these ways, we can support a stable and sustainable economic environment, which in turn helps protect and enhance UPP’s long-term investment returns and our members’ retirement income.
Delaney Greig, Director of Investor Stewardship at UPP, answers a few questions about the ISP.
Q: Why did UPP choose to focus on inequality?
Delaney: UPP’s fiduciary duty is to act in the best interest of our members, which includes understanding how systemic issues like inequality impact our investment portfolio and our ability to generate long-term investment returns. Addressing inequality as described in our ISP is a strategic business decision that supports our ability to pay pensions to our members in the long term.
Research from the Organisation for Economic Co-operation and Development (OECD), International Monetary Fund (IMF), US Federal Reserve, and academics, among others shows that inequality – which impacts human rights, Indigenous rights, labor issues, and equity, diversity, and inclusion (EDI) – leads to economic crises, slower growth, and political instability, and it hinders efforts to tackle other societal challenges like climate change. A dedicated stewardship plan enables us to support the mitigation of inequality and related issues within our investment portfolio.
Q: How did you create a framework to address this issue?
Delaney: We started by mapping out the many social issues both impacting and impacted by our investment portfolio and found that many tie back to inequality, an issue which spans across the economy. Then, we looked at the aspects of our portfolio where we could have the most tangible influence through stewardship activities such as engagement with companies, proxy voting, and policy advocacy.
More broadly, we drew from several international organizations to ground our framework in evidence and investor guidance. Our plan is informed by research from the World Bank, IMF, The Shareholder Commons, The Investment Integration Project, and The Predistribution Initiative (PDI) and was developed with support from The Shareholder Association for Research and Education (SHARE).
Q: Why is stewardship an effective way to tackle inequality within UPP’s investment portfolio?
Delaney: Stewardship allows us to influence and improve company practices using multiple approaches. Through proxy voting, we leverage our votes at company meetings to signal our expectations for fair labour practices and equitable compensation. Our engagement work allows us to get deeper into specific decent work concerns at individual companies such as workplace health and safety, supply chain risk, or forced labour, and to influence them to adopt new policies or practices. Policy advocacy helps us address these issues at a market level, supporting better baseline disclosure and standards across the economy. Collaborating with other investors through groups like the Labour Rights Investor Network and Investor Alliance for Human Rights amplifies our impact. By combining these approaches, we can effectively tackle both the specific and overarching aspects of inequality.
Q: Can you provide an example of how stewardship can positively impact key social issues?
Delaney: One example is our commitment to promoting a guardrail that supports internationally recognized decent work standards set by the International Labour Organization (ILO). These standards include fair wages and safe working conditions. By advocating for these principles, we aim to reduce unequal access to opportunities and mitigate unequal outcomes. This strategy not only enhances employee productivity and innovation, but also leads to better overall performance at both the company level and across the broader economy.
For example, a collaborative investor engagement involving UPP’s engagement provider SHARE through 2022 and 2023 led to Starbucks commissioning a third-party assessment of its approach to freedom of association and collective bargaining and helped enable constructive dialogue between the company and its workers seeking to bargain collectively. This move helps the company and its investors to ensure long term workforce stability and productivity in a labour-intensive industry.
Q: What are the challenges of engaging with companies on systemic risks like inequality?
Delaney: We can’t simply tell a company to address inequality. Instead, we highlight specific aspects that pose material risks to them such as forced labor, child labor, workplace discrimination, health and safety, and freedom of association. Globally recognized minimum standards exist for these issues, and it’s risky for companies to ignore them. To enhance our engagement, we collaborate with experts from SHARE, who have extensive experience in tackling complex labour and human rights topics and can guide our strategy effectively.
UPP’s approach to environmental, social, and governance (ESG) risks and opportunities is outlined in our investment beliefs. Through stewardship, we align company and financial system interests with long-term value creation for our members. We focus on systemic issues that impact the health of financial, environmental, and social systems. Learn more:
Media Contact
Kelly Conlon
Managing Director, Strategic Communications and External Relations
[email protected]
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