Investigation takes stock of venture capital's human rights oversight, finding vast majority of firms are failing responsibilities & lacking diversity
Venture capital (VC) funds focused on the technology sector hold growing importance in the development of emerging technologies, providing crucial early investment for start-ups working on areas such as artificial intelligence, biotechnology, and surveillance software. These technologies subsequently touch numerous aspects of our lives, and present benefits and opportunities for economic growth, healthcare, and services, but are not always designed with the protection of human rights in mind – and can carry significant risks to privacy and freedom of expression, or contribute to discrimination. As businesses, VC funds are responsible under the UN Guiding Principles on Business & Human Rights to take the necessary steps to ensure that their business activities and value chains respect internationally recognized human rights. Yet new research from Amnesty International finds the overwhelming majority of the world’s largest VC firms have failed to put in place robust human rights due diligence policies.
Amnesty International’s findings are documented in a report published in July 2021, Risky Business: How leading venture capital firms ignore human rights when investing in technology. The report focuses on the firms on the Venture Capital Journal’s list of the 50 largest VC firms, as well as three leading tech accelerators (Y Combinator, 500 Startups and TechStars). The authors reviewed publicly available information on each VC firm’s human rights due diligence processes, and sent letters to the firms requesting additional information. They found that none of the ten largest companies had adequate human rights due diligence policies in place, and that only one company (Atomico) from the list had due diligence processes in place that potentially meet the standards outlined in the UNGPs. The report also highlighted the lack of gender and racial diversity in the VC sector and funding and the harms that can result.
The Resource Centre invited the companies listed to respond to the report’s findings. We received responses from Third Rock Ventures, Index Ventures, Sofinnova Partners, and Sinovation Ventures.
In September, blog posts from BSR and the UN Human Rights B-Tech Project recognised the increasing prominence of private equity and VC funds in the development of technology that shapes our lives, and suggested ways that VC firms can meet their human rights responsibilities and contribute to a world where technology aids social progress by enacting policy commitments and strengthening human rights due diligence processes.