Resource Center

Human rights issues have been rising on the responsible investment agenda in recent years. The COVID-19 pandemic and the Black Lives Matter movement have provoked even more pointed discourse on the topic. The European Union’s current efforts to introduce rules to hold companies accountable for social and environmental risks in their supply chains further accelerate that ascent. This wave of legal requirements and normative expectations is impacting financial markets worldwide, with responsible business regulations already in place or quickly becoming valid.

This thematic engagement aims to improve the adoption of globally agreed corporate standards for managing and promoting human rights, as defined by the UN Guiding Principles on Business and Human Rights (UNGPs) and mirrored in the OECD Guidelines for Multinational Enterprises.

From a market perspective, engagement and voting on governance issues have been used as levers for influence for a long time. On the other hand, environmental and social issues were historically addressed from a values-based perspective or primarily for fact-finding purposes. Today, many responsible investors leverage corporate dialogue as a tool to influence and drive meaningful change and impact

There are many factors that rating agencies consider within its overall assessment. For example, ESG rating companies tend to look for at least three years of ESG metrics to determine company trends and long-term ESG targets, goals, and strategies to manage and reduce ESG risks at least five years ahead. Read on to learn about how Sustainalytics' Material Risk Engagement program promotes and protects long-term value by engaging with high-risk companies on financially-material ESG issues. (A North American Snapshot)

The construction industry can have a reputation for workforce insensitivity and is highly vulnerable to economic and social variabilities. The ESG Impacts of COVID-19 drive companies to adapt to significant challenges related to the demand for construction services. This construction sector research snapshot highlights relevant social issues that corporations face due to ripple effects from the pandemic using Sustainalytics’ ESG Risk Ratings and Controversies Research.

For investors looking to enhance ESG risk management and the long-term impact of sustainability efforts, a systemic approach can help identify interventions that will most effectively mitigate the risk of negative outcomes or divert the chain of events towards a more sustainable trajectory. Typically, this involves moving from single-issue or company-specific tactics to progressively integrate system-level considerations in ESG strategies. Targeting systemic change through active ownership is one way to acknowledge and start unravelling the dynamic web of global challenges.

As the global economy looks towards recovery after being impacted by the pandemic, the oil and gas industry faces a growing wave of shareholder activism and climate litigation due to a heightened focus on an accelerated transition as an indirect impact of the pandemic – painting an increasingly bleak picture for those within the industry.

While child labor remains a serious problem across industries and countries, it is only one part of the overall issues pertaining to children’s rights; companies and investors should recognize the scope and relevance of this topic.

December 10th is Human Rights Day and, as we approach the end of the year, recognition of this day offers a suitable moment to reflect on the extraordinary events that unfolded in 2020.

Today, October 16, is World Food Day, a campaign created in 1981 to raise awareness of hunger and poverty. With an estimated nine percent of the global population reported as undernourished in 2019, hunger and poverty remain a reality for millions of people with the situation being exacerbated by the COVID-19 pandemic.[1],[2]

October 7 is World Cotton Day–an annual event created in 2019 after four cotton-producing countries (Benin, Burkina Faso, Chad and Mali) applied to the UN for special recognition of the crop. Cotton has much to celebrate–it is the primary source of livelihoods and revenue for up to a billion people. That said, the positive benefits do not extend to everyone in the value chain, as significant human rights challenges have persisted in many countries. Change, however, may be upon us. Cotton could be set to face major dislocations driven by responses to human rights violations, with significant implications for investors.

Following the Council of Institutional Investors Conference, we highlight two emerging social issues that were top of mind for active investors, Cyberthreats and Human Capital & the Future of Work, and discuss how partnering on engagement can drive long-term value.

Labour rights issues in food supply chains are crucial matters to investors, both in terms of compliance with international human rights norms and national legislation, and from the material point of view of securing future supplies. With this background, GES, in collaboration with AP7, The Seventh Swedish National Pension Fund, conducted a pre-study to provide input for the development of a new engagement initiative.

GES has engaged the cocoa industry for many years to increase its effort in tackling the issue of child labour. As a part of its long-term engagement, GES published its second public report on the issue, including investor expectations and a corporate benchmark of leading cocoa and chocolate companies.

Sustainalytics hosted an online panel discussion about recent trends, company engagement and developments in modern slavery, along with a preview of Sustainalytics’ thematic engagement on modern slavery.

An estimated 40 million people are currently oppressed by modern slavery and companies are under increasing pressure to manage this issue to mitigate operational disruptions as well as compliance and reputational risks. Sustainalytics, FSI and Suncorp tackle this issue on Sustainalytics’ Perspectives on Modern Slavery – Australia webinar.

To establish how, and to what extent, investors are considering children’s rights in their policies and practices, GES also worked with the Global Child Forum, a Swedish not-for-profit foundation, to survey asset owner PRI signatories in 2014, 2015 and 2017.

Since the launch of the first Index, recognition of the human and economic consequences of poor nutrition has increased. Globally one in three people are now either undernourished, overweight or obese. Over the last 35 years obesity has more than doubled and has now reached epidemic proportions. Over the next 10 years, malnutrition is set to continue to increase.

Recognizing that benchmarks can play a powerful role in encouraging companies to uphold labor standards, KnowTheChain has benchmarked 20 ICT companies on the transparency of their efforts to eradicate forced labor from their global supply chains.

Sustainalytics in collaboration with UNICEF, The United Nations Children’s Fund, has published a new report titled, Investor Guidance on Integrating Children’s Rights into Investment Decision-Making. The guidance offers investors a practical toolkit on how to incorporate children’s rights into investment analysis and engagement activities.