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17 Dec 2024

UK: Research highlights role of investors in improving working conditions in care sector amid opaque & complex financial ownership structures

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In October 2024, new research by the University of Nottingham explores how investors and the UK Government can improve labour rights in the care sector.

Due to the complex financial ownership structures within the English social care sector, there is a need to go beyond typical shareholder engagement if labour exploitation problems in the sector are to be addressed.
"How can investors drive up labour standards in the English care sector?”, University of Nottingham

The research finds 17.2% of care companies do not have a modern slavery statement, and that there is “considerable variation in the quality and comprehensiveness of disclosure” for those who do have a a modern slavery statement. The research also found only a few care providers demonstrate good practice.

The majority of the largest care providers in England had some form of private ownership, and often had complex links to various types of institutional investor. It highlights the opacity of these ownership structures and goes on to explore the role of investors in working conditions in the sector.

The research makes several recommendations to investors and the UK Government, including asking investors to adopt measures to set and monitor labour standards and conduct labour-related due diligence on the companies they invest in; and expect private equity firms and real estate investors to do likewise.

There are significant concerns about the exploitation of workers recruited into the social care sector. As investors we believe that active stewardship of the assets in which we invest can make a difference. This briefing is an important exploration of how investor influence can be brought to bear to protect vulnerable workers in social care.
Dame Sara Thornton, CCLA Investment Management and Rights Lab Professor of Practice
Investing in the care sector is a crucial underpinning to a fair and sustainable economy. This research highlights serious challenges and risks to workers. It also provides actionable strategies to drive improvement. Leading investors are already showing how more responsible practices can reshape the sector. With demographic trends pointing to growth, investors and government have an unprecedented opportunity to create a more ethical, sustainable care system.
Charlie Crossley, Investment Engagement Manager at Friends Provident Foundation

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