Leads on an engagement by 11 Danish pension funds with Amazon say the first-of-its kind initiative reflects value the country places on labour rights.
A coalition of Danish pension funds collectively engaging with Amazon on employees’ right to unionise and collectively bargain on wages and working conditions say the initiative is working well and serves as a blueprint for other engagements with investee firms.
In 2022, Danish pension funds Sampension, PenSam and PKA came together on the engagement. The collaborative engagement initiative now includes nine other Danish institutional investors. Mikael Bek, Head of ESG at PenSam, said it was the first time that pension funds in Denmark had come together like this.
“It’s been quite a good discussion,” Bek said. “It could be the beginning of something more in the future where we are working together on direct engagement.”
Bek said it had wanted to target Amazon as the right to organise is very high on the agenda in Denmark and Scandinavia more broadly.
“It is also a good experience to sit down with all our colleagues in the business and do this collaborative engagement with Amazon,” he said.
“We’re not going to change the world. We’re totally aware of that. But this is a way to put pressure on Amazon that you also see in resolutions at their annual general meetings (AGMs).”
Earlier this year, Danish pension fund PBU divested Amazon over issues with labour rights after five years of engagement. Bek said PenSam was unlikely to take this route as unions it was in touch with have urged them to not exclude the company but stay as a shareholder and try and engage instead.
“When you sell the shares, you can’t do anything,” he added.
At Amazon’s 24 May shareholder meeting, investors pushed the company on trade union rights. Italy’s largest pension fund Cometa Pension fund, which manages US$13 billion in assets, opposed the re-election of Amazon’s CEO Jeff Bezos – a decision driven by its record on workers’ rights as well as racial and gender discrimination.
Several investors, including Norges Bank Investment Management, PenSam and PKA voted in favour of a shareholder resolution calling for third party assessment of Amazon’s commitment to freedom of association.
Last year, Amazon workers in the US seeking to form a union in New York filed a complaint with US labour regulators after Amazon organisers were arrested outside company warehouses. The company has a long-standing history of worker rights scandals at home and abroad. Investors have started to voice their concerns at AGMs.
Leading up to Amazon’s 2022 AGM, a group of asset owners, including public employee pension funds overseen by the New York City Comptroller, the New York State Common Retirement Fund, and the Office of the Illinois State Treasurer, urged Amazon shareholders to vote “against” the re-election of two directors — Daniel Huttenlocher and Judith McGrath — both of whom are longstanding members of the Leadership Development and Compensation Committee responsible for overseeing the company’s human capital management.
As the group noted, the two directors “should be held accountable for the committee’s insufficient oversight and inability to ensure that the company protects its workers’ health and safety, upholds its own corporate policies on human rights and freedom of association, and addresses unsustainable employee turnover.”
The US Securities and Exchange Commission adopted new requirements for companies’ disclosure of human capital information in 2020. The reporting is currently narrative but investors are pushing for more standardised information on elements such as diversity and turnover.
Amazon report on labour rights
Louise Aagaard Jensen, Senior ESG Manager at PKA, said the engagement with Amazon was initially focused on the firm publishing a report on how it operationalises its labour and human rights policies.
“So far, we have had several email encounters with them, writing back and forth,” she said. “We are trying to get a meeting with them to sit down and discuss it further. So, we are trying to understand the process they have in place to allow employees to be free to form unions.”
In 2003, PKA divested Walmart over labour issues, but Jensen said stewardship was now more sophisticated and it was pursuing an active ownership approach with Amazon, though divestment was “always on the table” for the pension fund manager.
PKA is a pension fund for health and social workers and Jensen said labour rights was high on the agenda for its members, hence why it has taken the lead on this engagement.
