The Principles for Responsible Investment (PRI) today launches ‘Advance’ – the largest collaborative stewardship initiative on social issues and human rights. More than 220 investors collectively representing US$30 trillion in assets under management (AUM) are involved, of which 120 will take active roles leading or supporting engagement with 40 initial focus companies. For the first time, the list of investors engaging each focus company within the initiative has today been published, enhancing transparency for all stakeholders.
Each of the 220 investors involved have signed a public statement acknowledging the urgency and systemic nature of human rights issues. In this statement they have recognised both the need to meet their own responsibilities to respect human rights as set out in international standards, and the importance of safeguarding human rights as a societal asset on which investment returns and global prosperity rely.
40 companies across both the mining & metals and the renewables sectors will be engaged in the first phase of the initiative. These include Anglo American (lead investors: Schroders & Morgan Stanley Investment Management); Nippon Steel (lead investors Nomura AM & Man Group); Goldfields (lead investors NBIM & Old Mutual); Orsted (lead investors Boston Common Asset Management & Storebrand); POSCO (lead investors EOS at Federated Hermes & JP Morgan Asset Management); Engie (lead investorsACTIAM & Ethos Foundation); NextEra (lead investors PIMCO & CCLA); Rio Tinto (lead investor ACSI, collaborating investors include Phoenix, Aviva & PIMCO); and RWE (lead investors APG & Church Commissioners for England).
The launch announcement was made today in Barcelona at PRI in Person, the world’s leading conference on sustainable finance, where several thousand delegates are gathering, either in-person or online, to discuss the future of ESG and responsible investment.
Speaking about the announcement, David Atkin, PRI’s CEO, said: “Investors’ collective efforts can truly bring about change in the way corporate practices impact people. Through Advance, we aim to offer investors the opportunity to shape the way forward through more ambitious stewardship and accelerate action on human rights and social issues. From tackling global inequalities to preventing damage to the environment which can impact the health of people for generations, we hope Advance will drive positive outcomes for workers, communities, and society at large; supporting investors in fulfilling their own responsibility to respect human rights; and helping the industry manage risks to overall investment returns.”
Key elements of this announcement include:
- New levels of transparency. PRI is, for the first time, publishing the list of investors engaging each of the focus companies.
- “Walk-the-talk”. Those investors involved in engagement have agreed to develop their own human rights policy and human rights due diligence process, to be ready within one year of joining the initiative, if they don’t have one already.
- First phase on metals & mining and renewables sectors. The first phase of the engagement programme will see investors lead engagement with 40 companies in two sectors: metals & mining and renewables. Further engagement with other sectors and separately with policymakers will take place across the course of the five year initiative.
- Engagement with affected stakeholders: the PRI aims to convene investors so they can meaningfully participate in finding solutions to achieve positive outcomes for people, together with other key stakeholders. This includes ensuring greater and more direct engagement between investors and affected stakeholders.
- Collaboration with other investor initiatives: The PRI is looking to coordinate with existing investor initiatives whose objectives align with those of Advance to avoid duplication of efforts and ensure alignment in the expectations being put forth to companies. An example of this is thecollaboration agreement that the PRI and the Investor Alliance for Human Rights have set out to coordinate the activities of both organisations related to collaborative corporate stewardship and engagement on human rights.
The PRI has been supported by two advisory groups – a signatory advisory committee and a technical advisory group – in the establishment of Advance, and will continue working closely with these two groups, benefiting from their respective expertise to deliver on the strategic objectives of the initiative. The names of committee members, FAQs, company and investor lists, the investor statement, terms of reference, and the methodology for sector and company selection are available publicly on the Advance website.
The PRI is supported by the United Nations (UN) in its aims and objectives. The UN Guiding Principles on Business and Human Rights, (UNGPs), which constitutes the global authoritative framework on corporate practice on human rights, directly address the role of businesses, including investors, to respect human rights. Institutional investors are called upon to respect human rights as set out in the guiding principles. They are positioned to collectively use their leverage to advance these basic rights and to achieve positive outcomes for people who are vulnerable to human rights abuses; the PRI’s work and latest research demonstrates this can be achieved through more ambitious investor stewardship.
Phil Bloomer, Business & Human Rights Resource Centre Executive Director, commented: “The booming renewable energy sector is not immune to risks of human rights abuses. Investor stewardship can play a critical role in ensuring that the energy transition is not only fast, but fair to all, and particularly to frontline communities affected by mining of transition minerals and deployment of wind & solar projects. We are excited to support the Advance initiative steer towards responsible investments and the prioritisation of the renewable energy sector.”
Nomura’s Chief Investment Officer (Equities), Yuichi Murao said: “Nomura Asset Management recognizes human rights as an ESG topic of particularly high importance. In our stewardship activities, we seek to gain a precise understanding of the human rights initiatives that companies within our portfolios are pursuing and engage in dialogue to encourage those companies to properly manage human rights risks. At the same time, we incorporate these factors into our investment decisions to fulfill our role as a responsible investor. PRI’s collaborate initiative ADVANCE is expected to be a highly effective means of mobilizing investors to encourage corporations to respect human rights and collaboratively work toward addressing social issues. As a member of the initiative’s advisory committee, Nomura Asset Management will play a leading role in collaborative engagement with other investors and maximize our contributions to addressing issues related to human rights.”
Nicole Martens, Head of Stewardship at Old Mutual Investment Group said: “Old Mutual Investment Group is proud to be part of the Principles for Responsible Investment’s (PRI) ‘Advance’ initiative, a critical collaboration on human rights and social issues. We recognise the importance of protecting human rights as a critical component of a Just Transition to more sustainable and inclusive economies. For our business, it is meaningless to achieve ESG impact on paper only, if nothing changes on the ground. Achieving real-world impact relies on investors engaging extensively with the companies in which they invest to make sure that they have appropriately ambitious, yet credible and pragmatic plans to support the elimination of human right abuses and systemic social issues over time – while focusing on the drivers behind these issues in our country such as poverty, unemployment and inequality. We look forward to playing our part in contributing to progress in this regard through the Advance initiative.”
Anita Dorett, Director of the Investor Alliance for Human Rights said: “Given the complementary nature of both our work at the Investor Alliance for Human Rights and PRI’s work on the investor responsibility to respect human rights in their stewardship activities, and in light of the vast effort that lies ahead to address these responsibilities across investments in different sectors, coordination between our ongoing work at the Investor Alliance and the newly launched Advance initiative will be beneficial both to achieving the strategic objectives in this regard and to improving the human rights situation of people around the world. Coordination will also ensure that Investor Alliance and PRI deploy their resources in a way that is synergistic and drives investors and businesses to respect human rights in their operations.”
Notes to editors
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Both the UN Guiding Principles for Business and Human Rights and the OECD Guidelines for Responsible Business Conduct have clarified institutional investors’ responsibility to respect human rights