Category: insight
4 Min read | March 17, 2022

Focus on: human rights

  • ESG
  • Human rights
Diverse group of people in a line holding hands.
Summary:

Human rights are the backbone of our society and underpin our perspectives on fairness and equity, so it should be no surprise the topic remains a central theme of our engagements.

Amplification through collaboration

Editor’s note: This article first appeared in our 2022 Focus List.

 

Businesses benefit from operating in markets where human rights are respected, and they too have their role to play in ensuring those rights are upheld. As a responsible investor, it’s our role to embed respect for human rights into our investment approach and to ensure our expectations of companies are clear.

 

2021 marked a decade since the implementation of the UN Guiding Principles on Business and Human Rights (UNGPs), one of the frameworks we continually refer to in our engagements. It remains as relevant as ever, along with other international covenants and standards that we commit to in our Responsible Investment Policy, helping to frame the expectations we have of corporations’ role in society.

 

We are a member of the advisory committee of the Investor Alliance for Human Rights (IAHR) and an active investor in the Interfaith Center on Corporate Responsibility, two entities with a longstanding focus on supporting investors’ dialogues with companies on human rights. Through these and other collaborations, such as the PRI’s most recent efforts to foster investor collaboration, we intend to continue our work with other investors who hold human rights as a central tenet of their investment approach. We know that capital influences society. We believe that through collaboration we can amplify our voice on human rights issues as we seek to fulfil our responsibility to encourage enhanced corporate disclosure and advocate for more robust policies and practices.

 

There are two sub-themes that will centre many of our dialogues around human rights this year:

 

  • Human rights in the supply chain

  • Digital rights

 

Human rights in the supply chain

 

Companies can benefit immensely from operating in various markets and expanding their global footprint. But this comes with responsibility. It is incumbent on corporate actors to consider their influence in ensuring their suppliers and others within their value chain have clear expectations about respecting and upholding workers’ rights and human rights.

 

We engage with companies with complex supply chains to ensure they have human rights policies in place; to assess their ongoing due diligence efforts with respect to human rights impacts; to encourage them to use their influence over others in their value chain to respect human rights; and to provide remedies where the rights of individuals have been infringed.

 

For example, through the IAHR last year, we co-led and/or participated in dialogues led by other investors with respect to the human rights crisis in the Xinjiang Uyghur Autonomous Region. This crisis could present human rights risks for a range of industries, such as apparel, food, technology, and solar energy. Our expectations are that companies first map their value chains to identify direct and indirect business relationships that are connected to the region, and to disengage from any relationships where they could be connected to human rights harm. We also seek enhanced disclosure from companies on their ongoing efforts. Geopolitical tensions are of course in the foreground of these conversations, including legislative efforts prohibiting the sale of goods that could be connected to forced labour in different jurisdictions, including Canada and the U.S.

 

Digital rights

 

In a world driven by technology, as much as we’ve grown comfortable with its benefits, we are increasingly confronted with its risks. We have been engaging technology companies for years now, to encourage the development of robust human rights policies and human rights due diligence—all grounded in proper board oversight. Human rights due diligence is the process that allows companies to identify, prevent, mitigate, and account for human rights impacts from their products and services, in alignment with the UNGPs. An important feature of robust human rights due diligence processes is that they provide companies with the opportunity to engage stakeholders, including people and communities whose rights could be affected by the company’s products and services. We are a strong proponent of meaningful stakeholder engagement, particularly in a sector that is defined by innovation that often results in new human rights implications for society.

 

Topics that will continue to feature in our conversations this year include: the spread of misinformation and disinformation, user privacy, bias in artificial intelligence, targeted advertisement, use of algorithms, and the metaverse. As companies develop innovative products and services, we encourage them to take an approach that considers human rights impacts from design to sale. Companies should be grappling with questions such as: What are the potential digital rights impacts for the user? Can any potential infringements be mitigated? If not, should the use of the technology be limited?

 

We will maintain an active role in our ongoing collaborative engagements including those grounded by the Investor Statement on Corporate Accountability for Digital Rights and the Investor Statement on Facial Recognition.

Key takeaways

  • We believe that through collaboration we can amplify our voice on human rights issues as we seek to fulfil our responsibility to encourage enhanced corporate disclosure and advocate for more robust policies and practices
  • An important feature of robust human rights due diligence processes is that they provide companies with the opportunity to engage stakeholders, including people and communities whose rights could be affected by the company’s products and services
  • Topics that will continue to feature in our conversations this year include: the spread of misinformation and disinformation, user privacy, bias in artificial intelligence, targeted advertisement, use of algorithms, and the metaverse

We also recommend reading:

4 Min read | May 21, 2022

Focus on: inequality
  • ESG
  • Inequality
Read more

4 Min read | Mar 17, 2023

Focus on: human rights
  • ESG
  • Human rights
Read more

4 Min read | Mar 30, 2022

Focus on: biodiversity
  • ESG
  • Biodiversity
Read more

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This material is for informational and educational purposes, and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. The views expressed herein are subject to change without notice as markets change over time. Information herein is believed to be reliable, but NEI does not warrant its completeness or accuracy. Views expressed regarding a particular security, industry or market sector should not be considered an indication of trading intent of any funds managed by NEI Investments. Forward-looking statements are not guaranteed of future performance and risks and uncertainties often cause actual results to differ materially from forward-looking information or expectations. Do not place undue reliance on forward-looking information.