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Taking Employee Welfare Seriously

Whether you are the CEO of a retailer with thousands of employees that meet your consumers face to face, or of a business with no consumer-facing employees at all, all successful companies must take the welfare of their employees seriously.

Domini’s Impact Investment Standards are organized around the key stakeholder groups that corporations depend upon to operate and generate profits, with a focus on the key themes that we believe best capture the strength of each of these relationships. Our standards help to identify companies run by managers capable enough to operate profitably while taking into consideration multiple stakeholders and the environment. Among these stakeholder groups, employees are perhaps the most critical.

We believe that corporations that treat their employees well should, in the long run, attain high levels of employee loyalty, high levels of productivity, and low levels of turnover – all potentially substantial contributors to profitability. We are therefore looking for companies that invest in the health and development of their employees, focusing on the following key themes:

  • Fair and Just Compensation and Benefit Programs
  • Commitments to Diversity in the Workplace
  • Empowerment and Investments in Training
  • Solidarity with Unionized Workforce
  • Continuous Improvement in Health and Safety

What does this look like in practice? We have released an Issue Paper on Employee Relations, which provides brief accounts of how some companies are responding to a range of key challenges including the gender pay gap, minimum wage reform and union relations.

Investors should pay attention to how the companies they invest in treat their employees. By doing so, Investors can gain fresh insights into the quality of corporate management teams and identify those companies that are best positioned to compete in a rapidly changing marketplace.

More importantly, this analysis sends a clear message to corporate employers that employees matter. When large companies take this seriously, and invest in their employees, they can create lasting value with ripple effects throughout our globally connected economies.