Investor human rights policy commitments: an overview

Just as for all businesses, institutional investors have a responsibility to respect human rights, as stated in the UNGPs and the OECD Guidelines for Multinational Enterprises. With an increasing number of regulations converging around these international standards, investors must recognise and exercise their responsibility to incorporate human rights considerations across their investment activities.

The UNGPs require institutional investors to exercise a three-part responsibility to respect human rights:

1. A policy commitment: Investors should establish a policy commitment to respect human rights, approved at the most senior level and embedded throughout the organisation to inform investment decisions, stewardship and policy dialogues.

2. Due diligence processes: Investors should manage actual and potential negative human rights outcomes; such considerations should be reflected in investors’ investment decision-making processes, including in portfolio construction, security selection and allocation, and / or in selecting, appointing and monitoring external managers / funds and other service providers.

3. Access to remedy: Investors should enable or provide access to remedy for people affected by their investment decisions. For outcomes that investors are directly linked to through an investee, investors should ensure that investees provide access to remedy for people affected.

What makes a good human rights policy?

Policy commitments listed below are selected based on their level of alignment with the UNGPs. A policy commitment closely aligned with the UNGPs is one that is:

• approved at the most senior level of the business;
• informed by relevant internal and / or external expertise;
• integrated in governance frameworks, management systems, investment beliefs, policies and strategy to inform investment decisions, stewardship of investees and policy dialogue; and
• publicly available and communicated to all relevant parties.