LSE - Laboratory for Advanced Research on the Global Economy - Investment & Human Rights Project

In June 2011, the UN Human Rights Council endorsed the UN Guiding Principles on Business and Human Rights (‘UNGPs’), which sets out the duties and responsibilities of State and business actors regarding human rights, and also provide practical policy recommendations.  The standards set out in the UNGPs are increasingly being incorporated into other UN and multilateral investment-related standards, strengthening human rights safeguards and aligning human rights-related expectations. These standards, and also a guidance tool developed by the United Nations Environment Programme Finance Initiative, are provided below.

The performance standards and operational and safeguard policies of development and private banks now incorporate human rights-related expectations, either expressly or through ‘environmental and social’ standards that address human rights issues such as land acquisition and compulsory resettlement, health and safety, and cultural heritage.  Increasingly, these standards and policies are aligning with the expectations set out in the UN Guiding Principles for Business and Human Rights (‘UNGPs’).  For example, the IFC Performance Standards were recently revised and now expressly refer to the standards articulated in the Guiding Principles.  Provided below are policies and standards used by the World Bank, the IFC and several regional development and investment banks.  Also provided below are the Equator Principles, a private banking and finance sector initiative that has recently aligned its performance expectations with the Guiding Principles.

Domestic-level reporting requirements that address human rights-related issues are increasingly being developed by regulatory agencies, and applied directly to investors, as well as to companies in which investors may invest.  Many of these reporting initiatives address specific concerns, such as conflict minerals or investment in emerging geographies.  However, in line with shifting stakeholder expectations, regulators are increasingly exploring opportunities to encourage and require broader non-financial reporting, including reporting on material human rights-related risks.  Accordingly, it is increasingly important that investors consider non-financial risks in relation to their reporting activities.  Further, non-financial reporting by companies increases the human rights-related information available to investors when assessing the risks associated with particular investment decisions.  Provided below is a recent update by Shift of corporate reporting requirements (including requirements relevant to investors) as well as the US Government’s Myanmar Responsible Reporting Requirements, a high profile investment reporting initiative.  These resources will be supplemented in due course.

Stock exchanges are increasingly exploring opportunities to promote good human rights practice amongst listed entities, including by establishing sustainable stock exchange initiatives, and also by publishing guidance material to support listed entities to address and report on human rights-related risks.  Provided below are examples of such initiatives.  These materials will be supplemented in due course as further sustainable stock exchange initiatives are identified.

In addition to State-driven UN and multilateral standards, there are a number of responsible investment standards developed by the investment industry that address human rights.  These initiatives have been developed to explore investment-related human rights as they relate to the investment industry and pension funds.  They are also directed to promoting the development and implementation better policies and practices.   Provided below are examples of initiatives used by responsible investors to manage their human rights risks, including through engaging with investee companies and clients.

Provided below are reports and other materials prepared by civil society organisations that examine investment-related standards and investors’ human rights performance in connection with those standards.  These reports examine the strengths and shortcomings of investment-related standards and their implementation and suggest opportunities to make these standards and their implementation more effective.

Provided below are resources that examine the use of investment-related standards to address and manage human rights risks associated with investment activity.  These resources will be updated periodically, and will aim to highlight good practice in investment decision-making and related oversight and monitoring activities.  The case studies seek to promote consideration of human rights outcomes for investors, business, governments, local communities and other stakeholders associated with the use of investment-related standards, and to identify different approaches that have been taken to meet the performance expectations they set out.