A new set of guidelines have been launched in order to help investment firms boost the incorporation of human rights into a company’s business goals.
Written collaboratively by the Institute for Human Rights and Business, the Interfaith Centre on Corporate Responsibility and Calvert Investments, the framework aims to help investment firms implement the UN’s Guiding Principles on Business and Human Rights.
The document, entitled Investing the Rights Way, provides a detailed explanation on how investment firms should understand the need for incorporating human rights within their core principles.
It has been designed to allow investment companies engage with the issue, helping them to rank companies based on their human rights performance. Additional benefits from the new framework include encouraging investment firms to engage with environmental, social and governance (ESG) initiatives, whilst assisting research on investor attitudes to human rights issues.
Investing the Rights Way draws on three key elements that investors should consider as part of their work, as detailed by Chloe Poynton for American non-profit BSR:
1. Human rights policy: does the company host human rights policies that match up with the Guiding Principles?
2. Human rights due diligence: does the company want to show its respect for human rights through a robust due diligence process and if so how?
3. Grievance mechanisms and remedies: does the company offer grievance procedures? Does it deliver remedies if human rights are breeched?
The report should encourage investment firms to respect and engage with human rights at a much higher level.
It argues that companies that infringe upon human rights face operational, regulatory and legal costs, and could damage their reputation and increase investment risks, so that financially and ethically, ignoring human rights is just not worth it.