Overall, we were pleased by the response to the pandemic by our focus companies. Health and safety measures were put in place across all the food retailers including enhanced cleaning protocols, PPE for staff and plexiglass screens at checkout. Companies stepped up their employee support, with the vast majority guaranteeing paid sick leave and online mental health support.
Our engagement calls also highlighted a sense of togetherness, with examples of leadership encouraging a culture of flexibility and extending grace, e.g. to those dealing with childcare issues.
From a wage perspective, we saw increased hourly wages or one-time bonuses universally for key workers. However, our engagement is ongoing to keep these pay rises in place permanently. We also continue to engage on the topic of workforce disclosure. Other than Tesco and (newly in 2020) Fast Retailing, it has been disappointing to see that none of the remaining focus companies have committed to completing the Workforce Disclosure Initiative (WDI) survey.
Within supply chains, we have seen both positive and negative reports. Despite facing severe restrictions as a nonessential clothing retailer, Fast Retailing continued to enhance their oversight of supply chain risks from both a financial and worker safety standpoint5, including overall enhanced transparency. In contrast, there were reports of Asda (Walmart subsidiary) reneging on clothing supplier contracts, despite record food sales6.
Examples of strong company practices included:
• We had several high-level dialogues with Sysco, confirming continuous bonus pay, and service adjustments to support their customers in adjusting to new safety measures.
• Tesco: A posterchild of proactive, direct investor dialogue and sharing information. Tesco also gave permanent jobs to 16,000 staff taken on in Q2 peak pandemic hiring7.
• Fast Retailing: No relationship with suppliers was ended because of Covid-19, and the company embarked on multistakeholder cooperation to support partner manufacturers8.
• Dollar General announced that they will be compensating their frontline staff for hours lost to receive the Covid-19 vaccination9.
Disappointing responses in 2020 included:
• One corporate insisted on maintaining their anti-unionisation practices in some parts of their business, neglecting international labour standards.
• No responses from Costco Wholesale Corp, George Weston Ltd or CECONOMY to our repeated outreach.
• Still very little disclosure on workforce issues, wages, or along initiatives such as the WDI, which is widely supported by the investor community.