Making decent work and employee wellbeing matter within the SDGs

Oliver Taherzadeh of MWM partner Stockholm Environment Institute, York (SEI York) introduces new research exploring sustainable work and wellbeing measurement within the SDGs, with a particular focus on corporate reporting and SDG8.

Goal 8 of the SDGs, to ‘promote inclusive and sustainable economic growth, employment and decent work for all’ is an ambitious, yet lesser-known aim within the Global Goals agenda. It represents a crucial departure from the idea that safeguarding employees, and their well-being in the work environment, in some way acts as an economic ball and chain on business, national and global development. Nurturing employee well-being has a social and economic imperative and is a precondition to achieving Goal 8 on Economic Growth and Decent Work, as well as contributing towards progress on good health and well-being (goal 3), gender equality (goal 5) and reduced inequalities (goal 10).

Whether we work-to-live or live-to-work we cannot escape the fact we spend a significant portion of our lives within the work environment. Moreover, our experiences and remuneration within work are critical to shaping our family relationships and own emotional and physical health outside of work. To this end, employment represents a fundamental determinant of our individual well-being.

However, not all jobs are equally valuable in the role they play in individual quality of life. In order to meaningfully understand the effects of employment on individual well-being we must collect systematic information on the quality of working life. Failing to do this poses a risk to business, government and society at large.

At the business level, a company which fails to prioritise employee-wellbeing within its growth model is likely to experience lower productivity, declining mental and physical health, increased absenteeism, more rapid staff turnover and inferior service of its workforce – thereby reducing its profitability via decreases in staff efficiency.

At the national level, the observed effects of an unhealthy and unhappy workforce are threefold. First, there are likely to be higher rates of short-term absenteeism and possible frictional unemployment, reducing government tax revenue, and increasing net borrowing to maintain the same level of spending on public services. Second, higher levels of unemployment impose a severe economic burden on public finances through increased spending on out-of-work benefits, growing levels of crime, and greater demand for health services due to deteriorating mental and physical health. Lastly, a poor quality work environment is a major driver behind the migration of highly educated and skilled labour away from their country.

Consequently, the propensity for the effects of poor employee well-being to become ‘externalised’ from business to government through dwindling tax revenue, rising social spending and ‘brain drain’ underpins its status as a shared concern across businesses, national governments and international policy communities.

Despite its importance, employee well-being is rarely treated as an integral component of sustainable development and has had little traction to date within frameworks designed to monitor and report social progress.

How is employee well-being currently measured at different levels?

Preliminary research, outlined in a working paper report launched today by Measure What Matters, has sought to explore the issue of employee well-being, to understand its coverage within corporate, national and international sustainability reporting.

Based on a sample of corporate, national and international frameworks assessing and managing monitoring and reporting of employee well-being we identified six broad dimensions to employee well-being: Health and Safety, Local Economy, Supply Chain Impacts, Personal and Career Development, Equality and Diversity, and Human Rights and Social Justice.

In general, corporate reporting frameworks tend to capture dimensions of employee well-being more broadly and in greater depth, with the unexpected exception of job security, which is instead a priority at national level given its relation to the macroeconomic objective of secure and stable employment within a population.

Overall, the corporate sector reporting frameworks capture aspects of well-being in more detail (25-40%), than national (0-20%) and international (0-30%) guidelines and reporting frameworks (Figure 1).

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Figure 1: Levels of coverage of different aspects of employee well-being in corporate, national and international sustainability reporting frameworks

Despite employee well-being within business supply chains being reported at the corporate level, there was a chronic lack of coverage of labour practices exercised along supply chains within national and international reporting frameworks. Given the disparity of quality of work experienced by workers within global supply chains there is a clear need to develop reporting mechanisms between businesses, governments and international bodies in order to level the quality of employment of the global workforce.

Employee well-being reporting across the economy.

The report also examines levels of employee well-being reported within the global economy, by large multilateral corporations.

We analysed corporate disclosures against Global Reporting Initiative guideline indicators from 50 multinational corporations, representing Technology, Consumer Goods, Oil & Gas, Consumer Services and Basic Materials sectors to elicit the current state of corporate reporting on well-being. We analysed over 1000 disclosures against the Global Reporting Initiative indicatorsfrom organisations primarily based in North America, Europe and Asia.

Our analysis finds clear differences in the materiality of well-being between sectors (Figure 2). For example, within the Local Employment dimension Basic Materials and Oil & Gas businesses exhibited significantly higher levels of reporting levels (43% and 32% respectively) than Consumer Services and Technology companies (4% and 8% respectively). This disparity is unsurprising given the tendency of extractive companies to use Local Content Policies (LCPs) which stipulate ‘% local personnel employed’ and ‘% contracts with local suppliers’ in order to secure extractive agreements with source governments.

sdg8 blog fig 2

 

Figure 2: Levels of corporate disclosure against different aspects of employee well-being in the Global Reporting Initiative’s guidelines based on 1127 indicators disclosures from 50 top global multinational corporations.

Our findings also allude to a gap between reporting of employee well-being and active goal-setting to safeguard the work-force across the different dimensions studied. For example, on the issues of employee well-being in business supply chains, the persistence of slave labour, forced labour, chronically low pay for workers, hazardous working conditions, barriers to employee unionisation, labour abuse and discrimination of employees within supply chains indicate increased reporting on supply chain employee well-being is not necessarily a panacea for issues besieging employee well-being within the supply chain.

To read the full findings and recommendations of the report, click here

 


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