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

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.

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 Columbia Threadneedle 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.

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

Rosa is a corporate engagement practitioner who joined the Responsible Investment team in 2020. Prior to joining BMO Global Asset Management, Rosa led the proxy voting program, as well as various corporate engagement initiatives on ESG topics at NEI Investments, the asset management arm of Canadian wealth firm Aviso Wealth. Rosa has extensive experience in North American corporate governance, engaging management and board members on ESG. She also serves on the Advisory Council for the Investor Alliance for Human Rights aimed at education and integration of the investor responsibility to respect human rights through the investment and active ownership process. At BMO GAM Rosa focuses on engagement and voting of the Canadian market. She holds a BA in Political Science and an MSc in International Development Studies from the University of Amsterdam.

Rosa van den Beemt
Nina Roth
Nina Roth
Director, Responsible Investment

Nina is a Director in BMO Global Asset Management’s Responsible Investment team. She joined the firm in 2019. Nina oversees all reo® engagement, and focuses on ESG analysis and engagement for financials and cross-sector social engagement. Before joining BMO GAM Nina worked at Germany’s development agency (GIZ), engaging emerging markets financial institutions and their regulators on sustainable finance. Nina also worked for UBS’s environmental and social risk team in Hong Kong, Zurich, and New York, as well as for Deutsche Bank in Frankfurt, where she established the bank’s ESR framework. In 2014, Nina founded the Roundtable on Sustainable Palm Oil's financial institutions task force. Nina holds a master’s degree in political science.

Nina Roth
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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 Columbia Threadneedle Management Limited and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

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