A new ICCR initiative aims to direct the impact of the investment community to drive business action on human rights
The recent launch of the Interfaith Center on Corporate Responsibility’s new Investor Alliance for Human Rights
indicates positive progress on addressing human rights abuse in supply chains. And also the clear need for companies to work harder to bolster efforts to look after people working throughout their entire value chains, spurred on by the investment community.
The UN guiding principles on human rights and business offer a solid framework to help companies assess human rights risks. But there is still an apparent gap between those showing leadership in integrating such principles into their companies and those that are still unaware of just how far their core operations may be linked to human rights abuse.
And the recent Corporate Human Rights Benchmark
report offers further evidence that effective assessment of corporate human rights performance eludes many companies.
The new IAHR is designed to engage investors on human rights, in much the same way the likes of CDP and Ceres have rallied the finance community to demand more disclosure on climate change impacts. As ICCR’s senior programme director David Schilling says, “Given the current challenges to human rights norms in the US and globally, the broader investor community can play a major role in safeguarding human rights.”
He says that a number of asset owners and managers have indicated to ICCR that there is a need “to work together to bolster the ‘S’ in ESG, which starts with a strong focus on human rights”.
According to ICCR, the alliance has been created as an umbrella under which a “coalition of the willing” from across the investment community can advocate more “immediately, consistently and strategically” to protect human rights and to act as a deterrent against any regressive legislative action that governments might consider.
The private sector, and multinational businesses in particular, exert great influence on socio-political developments, including the enforcement of human rights policies. Of the world’s top 100 economies, nearly seven in ten are business entities rather than countries, so driving investment decisions with an increased bias towards ethics and human rights will support such human rights enforcement in mainstream business activities.
There is also more pressure on companies to get to grips with social issues. The United States Supreme Court has just heard evidence
in response to a call for corporations to be sued over complicity in human rights abuses abroad.
However, as with any initiative designed to get widespread support, its success will only be realised if it gains traction with a wide array of corporates and investors alike. Andreas Klug, global group privacy officer at Worldpay, says that business support for the IAHR could have a tangible positive impact towards a bias for investment in ethically driven businesses. He says that investor activity is increasingly driven not just by maximising short term profit but by looking at long term return on investment.
Klug argues: “As sustainability becomes a more prominent factor in investment decisions, this amplifies the need for metrics to inform sustainability – and it’s not a stretch to say that ethical business practices that embed human rights frameworks into the supply chain will provide a significant metric in this regard.”
A number of banks and investment houses have publicly backed the IAHR. ABN Amro’s head of environmental, social and ethical risk, Maria Anne van Dijk argues that “collective action is crucial”.
She highlights the Dutch banking sector agreement, which has seen Netherlands banks working together with NGOs and the government for the first time on human rights. Van Dijk says that ABN Amro has been “searching for structural solutions that an adhering bank cannot solve alone to achieve a material positive impact for people potentially facing adverse human rights issues”.
Addressing such a complex issue demands a multi-stakeholder approach, and getting investors on board is a smart move, Schilling says. He points that that when ICCR issued a call to action in the wake of the collapse of Rana Plaza in Bangladesh in 2013, the response was immediate. In a short period of time ICCR was able to amass an investor coalition representing over $4tn in assets to call for corporate participation in the newly formed Accord for Fire and Building Safety in Bangladesh
This gives Schilling hope for the new IAHR, as the Rana Plaza response “was a compelling indication that human rights and worker rights are of profound concern to the broader investor community and that a central hub for organising this work would be welcome”.
Join Maria Anne van Dijk, Andreas Klug and many other business experts at Innovation Forum’s business and human rights London conference 1-2 November. Click here for full details.