Labour rights are a basic human right and are universally applicable. However they’re not always respected, particularly in industries with high-intensity production. Triodos aims to foster business compliance to protect fundamental worker rights. 

What are labour rights?

Although labour rights are included in the Universal Declaration of Human Rights – adopted by most countries in 1948 – it took a long time before the business community embraced them. It wasn’t until 1998 that the International Labour Organization (ILO) specified four fundamental principles and rights at work that should be recognised by all businesses. These are: 

  1. freedom of association and recognition of the right to collective bargaining
  2. elimination of all forms of forced or compulsory labour
  3. effective abolition of child labour
  4. elimination of discrimination
     

How does Triodos foster business compliance?

When screening companies for selection in our sustainable investment universe, we critically assess their potential for violation of basic labour rights. We also look at the type of industry the company operates in, and the type of worker most at risk in that industry. For example we assess if the risk is higher for own employees or for workers in supply chains.

When an industry is considered to be high-risk for potential labour rights abuse, regardless of the worker type, we require companies operating in that industry to have certain policies and procedures that demonstrate their awareness and management of the risks. We also investigate the occurrence of controversies around labour rights. In those cases we look at how the company has addressed the issue, the strength of its policies and procedures, and what it has done to ensure that the incident is not repeated.

Which industries are high-risk?

Some industries, because of the nature of their production processes, have a high-risk of potential labour rights abuse. Triodos currently considers the industries at highest risk for violating own employee rights to be automobiles, construction materials, energy, food & staples retailing, hotels, restaurants & leisure, metals & mining. We consider industries at highest risk for violating the rights of supplier/contractor employees to be communications equipment, computers & peripherals, food products, retailing and textiles, apparel & luxury goods. All companies in these high-risk industries must have relevant labour rights policies.

Isn’t the country of operation also relevant?

In practice companies often have complex and global supply chains that are difficult to trace. We have found that labour rights abuse also occurs in developed countries, for example violations related to age discrimination, unpaid and/or involuntary over-time, and health and safety. We therefore don’t make a distinction between countries of operation.

What companies do not meet Triodos standards?

An example of a company that has been excluded for potential investment because of its involvement in the violation of labour rights and its inability to prove awareness of the issue is Apple.

Over recent years, Apple has been involved in many controversies regarding basic labour rights at its supplier factories. Some cases were related to the death of employees because of high work pressure, and others cases concerned health and safety issues. The company has long ignored its responsibility for working conditions in its supply chain. It has only been in the last few years that it has it started to take action, primarily under pressure of nongovernmental organizations and public opinion.   

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.