The UN Guiding Principles at 10: Scaling up investor action on human rights
June 2021 marks the 10th anniversary of the UN Guiding Principles on Business and Human Rights (UNGPs) and their unanimous endorsement by the UN Human Rights Council (HRC). This move by the HRC established the UNGPs as the globally agreed standard and baseline for what governments and businesses need to do to embed respect for human rights in a business context. Their unanimous endorsement by the HRC (resolution 17/4) was therefore a landmark moment for business respect for human rights but also for better business.
Taking advantage of the UNGPs 10th anniversary, the UN Working Group on Business and Human Rights, which is mandated by the HRC to promote the UNGPs, decided to use that milestone as an opportunity to:
- Reflect on progress and challenges; and
- Make a renewed push for scaled-up global implementation of the UNGPs over the next decade.
The Working Group therefore launched the “next decade” or UNGPs 10+ Project in July 2020. On 16 June, the anniversary date for the HRC endorsement of the UNGPs, the Working Group will release its stocktaking reports. The roadmap will follow later in the second half of 2021.
A key overall message of stocktaking is that the UNGPs have succeeded in providing a globally agreed-upon standard and baseline for what governments and businesses need to do to embed respect for human rights in a business context – a clarity and common platform for action that did not exist before 2011.
Among its findings, the report highlights the need to leverage the financial sector and the environmental, social, and governance (ESG) momentum, even though major gaps remain in that area.
In recognition of the need to promote increased uptake of the UNGPs among institutional investors, including as a key means to speed and scale up business respect for human rights, the UNGPs 10+ Project also seeks to shine a brighter light on the role of asset owners and managers in Taking stock of investor implementation of the UN Guiding Principles on Business and Human Rights.
This addendum report finds that while engagement with human rights issues among socially responsible investors has a longstanding history, the shift in approach to aligning investment practices with the UNGPs has only recently begun. Human rights policy commitments are growing in numbers among investors and human rights benchmarks are supporting their efforts to assess companies on human rights. Investors are also activating their collective leverage to engage companies on the uptake of the UNGPs among portfolio companies, including by pressing companies to improve their performance on the Corporate Human Rights Benchmark, an initiative coordinated by the Investor Alliance for Human Rights, involving 208 investors representing over $5.8 trillion in assets under management. Shareholder resolutions increasingly call on companies to implement the UNGPs, and some of the world’s largest asset managers have cast votes in favour of human rights due diligence in the past two years.
Despite progress, human rights are still rarely addressed in a systematic or principled way among the institutional investor community. Most investors have significant capacity challenges with regard to business and human rights, often assuming that sustainability or ESG expertise is sufficient to address and engage on human rights risks in their investments. As a result, investor knowledge of human rights, including how human rights are defined, how they are relevant across ESG factors, and what meaningful human rights due diligence looks like, remains limited. Even areas of investor activity where consideration of social impacts are seemingly embedded have largely not used the human rights due diligence framework laid out by the UNGPs. This includes in the context of impact investing and investing toward achievement of the Sustainable Development Goals. The ability of investors to meaningfully assess and prioritise human rights risks connected with their investment activities has also been challenged by the fact that meaningful corporate human rights disclosure has been the exception over the past decade. A root cause of this has been the inconsistent integration of the UNGPs across the myriad reporting frameworks, benchmarks, and other data and research products used by investors to assess companies.
Widespread implementation of the UNGPs will continue to be stymied unless investor respect for human rights is sped and scaled up. The report concludes with a set of recommendations for increasing investor action over the course of the next ten years and beyond.
To learn more about the findings and key recommendations for investors, States, and investor ecosystem actors, join the Working Group, Norges Bank Investment Management, and the Corporate Human Rights Benchmark on Thursday, June 17, 10:00-11:15am ET for the virtual launch of the report.
Anita Ramasastry, Member of the UN Working Group on Business and Human Rights