Upholding human rights: how we’re driving improvements in nursing homes

Discover our expectations for improved quality of care and working conditions in nursing homes.
August 2021
Nina Roth

Nina Roth

Director, Analyst, Responsible Investment
Rosa van den Beemt

Rosa van den Beemt

Vice President, Responsible Investment Analyst

Before the outbreak of the Covid-19 pandemic, healthcare issues at nursing homes were often overlooked. The past year starkly demonstrated that inadequate working conditions and inadequate elderly care are important human rights issues that urgently need addressed. As investors, we must contribute to driving positive change in this sector.

Many nursing home staff work in stressful environments. They often earn low wages on part-time hours or through precarious arrangements – in some countries without sick pay or union representation. Most staff are women, and often they are minorities or from marginalised backgrounds. Nursing homes struggle to attract and retain enough workers to meet current demands, let alone the need for more carers to match demographic shifts. The staff-to-resident ratio in many homes is inadequate to provide even basic care to residents, let alone the quality required during a pandemic.

The glaring spotlight of Covid-19

During the pandemic, nursing home workers have been caring for those most vulnerable to the virus in extremely high-risk environments. The sector found itself in the eye of the storm, largely owing to a global unpreparedness for a pandemic of this scale and failures by governments to support and regulate nursing homes and their residents. This exacerbated the inherent vulnerabilities of aged care, and led to some very sobering numbers:

  • According to this report, an average of 41% of all deaths across 22 countries happened in nursing homes.
  • Hundreds of thousands of nursing home staff became infected during the pandemic – many of whom either died or are now facing long-lasting aftereffects.

Throughout the pandemic, scandals relating to nursing homes were prevalent. In Canada, this report by the International Longevity Centre declared the diminishing recognition of the human rights of older people as the most severe impact of the Covid-19 pandemic… a statement that speaks volumes and is backed up by plenty of alarming information relating to rising elder abuse and ageism, among other violations of health care regulations within nursing homes.

Meanwhile, healthcare workers at Responsive Group’s Rykka Care Centres filed a human rights complaint for gender and skin colour discrimination, calling for better working conditions and the replacement of management at the centres. The provincial government was also named a Respondent for its failure to deliver its responsibility to properly regulate and oversee operations at long-term care homes.

In the UK, Amnesty International reported that a series of “shockingly irresponsible” decisions taken by Government – including the decision to discharge infected hospital patients to nursing homes – risked the lives of tens of thousands of elderly lives and led to multiple violations of their human rights. One year into the pandemic, research by UNI found that most care workers still do not earn a liveable wage, and nearly a third are without adequate access to personal protective equipment.

Why does this matter to investors?

As nursing homes recover from the virus, we must use this opportunity to improve the sector permanently by developing a more resilient and humane working model. Doing so will address fundamental human rights issues and contribute to a fairer and more sustainable society for us all.

If human rights weren’t reason enough to demonstrate why improving this sector is so important, there are also important business reasons to consider. Better working standards will promote better care, ultimately helping to mitigate legal, reputational and operational risks for companies within this sector. For example, this Bloomberg Canada news story from May last year reports on plunging shares in long-term care home companies in the aftermath of the Ontario care scandal, whereby a Canadian Armed Forces report detailed “horrific” treatment of residents.

Taking steps towards positive change

Companies must raise standards for working conditions and quality of care… but the weight doesn’t fall solely on their shoulders: governments and regulators must ensure that regulatory environments and funding provisions enable nursing homes to meet higher standards. As investors in this sector, our role is to set clear expectations of companies for improving these standards.

Along with 99 other financial institutions and representing $3.5trn in combined assets under management and assets under advice, we developed and signed the UNI Global Union investor statement on expectations for the nursing home sector. The statement is still open to be signed and supported by investors. We’re asking investee companies to:

  • Develop and implement standards that not only adapt to but go beyond local regulatory requirements for understaffing, health & safety, wages, collective bargaining and quality of care.
  • Those companies that own real estate used for nursing homes – such as Real Estate Investment Trusts – to support operators in meeting these expectations by overseeing their properties and monitoring processes to ensure our standards are met.

At BMO GAM we have contacted 13 nursing home companies and trusts to urge appropriate staffing levels, improved health and safety standards, proper use of PPE, fair wages, pandemic hazard pay, and freedom to unionise. At the time of writing, three of these have responded, with dialogues due to take place soon.

We have also supported AGM questions at Fresenius SE around labour standards , and shareholder proposals filed by fellow investors at companies such as Chartwell Retirement Residences, requesting more information on human capital management and paying a living wage to staff.

Final thoughts

We believe these expectations have come at a crucial time: the bar for working conditions and quality of care in nursing homes clearly needs to be raised, and we look forward to working with companies and other investors to create change for good. We believe that addressing these issues will improve confidence across investors, regulators, workers, residents and their families in the nursing home industry – in this period of grave concern and beyond.

Risk warnings

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

BMO Global Asset Management’s voting, engagement and public policy work is conducted independently of the wider BMO Financial Group. Positions taken by BMO Global Asset Management may not be representative of the views of the BMO Financial Group as a whole or of the other lines of business.

Use our handy glossary to look up any technical terms you are unfamiliar with.

Get to know the authors

Nina Roth

Get to know the authors

Nina Roth, Director, Analyst, Responsible Investment

Nina joined BMO GAM in 2019 as an ESG analyst. In her engagement she focuses on financial institutions and social issues across sectors. Outside of work, pottery and the absurd world of crypto currencies are her passions.

Rosa van den Beemt

Rosa van den Beemt, Vice President, Analyst, Responsible Investment

Rosa joined BMO GAM’s Responsible Investment team in 2020, covering extractives in North America and specialising in voting and corporate governance, diversity and inclusion, and human rights. She also serves on the Advisory Council for the Investor Alliance for Human Rights. Rosa hails from the Netherlands and now lives in Toronto, where she loves going on canoe trips across Canada’s beautiful lakes.

Risk warnings

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

BMO Global Asset Management’s voting, engagement and public policy work is conducted independently of the wider BMO Financial Group. Positions taken by BMO Global Asset Management may not be representative of the views of the BMO Financial Group as a whole or of the other lines of business.

Use our handy glossary to look up any technical terms you are unfamiliar with.

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