Global Witness report alleges EU investors help bankroll human rights & environmental abuses; incl. co responses

On 6 September 2018, Global Witness published a new briefing paper on the role that EU-based investors have played in supporting projects linked to human rights abuses, land grabs and large-scale environmental destruction. The report argues that while political momentum - particularly through the EU’s landmark Action Plan on Financing Sustainable Growth - is building to make the financial sector more accountable, the Commission’s legislative proposals released in May lack robust measures, and calls for mandatory regulations for EU-based investors.

Business & Human Rights Resource Centre invited those investors mentioned but who did not provide a comment in the report to respond, namely Aberforth Parnters, Legal & General, Silchester and Schroders. 

Aberforth did not respond, and Silchester told us over the phone that they do not provide comments on their portfolio to non-clients. Legal & General sent a statement they also sent us in relation to another report, which can be accessed here and below. Schroders' response can also be accessed below.

The following investors/companies provided comments in the report: Standard Life Investments, Aviva, Soco International, Vedanta, Aberdeen Standard Investments, HSBC, Standard Chartered Bank, Credit Suisse. 

Note: Business & Human Rights Resource Centre previously sought a response from Golden Agri-Resources (GAR) in relation to one of the case studies - see here for more information. The report also refers to Investec, Deutsche Bank and CBR, however these companies no longer hold investments in the specific projects mentioned.

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Réponse
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11 October 2018

Response by Schroders

Auteur: Schroders

Thank you for the opportunity to comment on our holding in Soco International ahead of the upcoming publication of the weekly newsletter. 

We are committed to examining environmental or social risks that could prove material to investment decisions across the funds we manage, and to engaging with companies where we find shortfalls. 

In our experience, robust engagement with companies in which we invest allows us to exert pressure we could not by selling those shares.

We had discussions with Soco in July 2014 about the events. We have examined Soco’s role in the corruption and violence described and engaged with the company to both strengthen our understanding and to compel the company to respond appropriately.  

We believe the company took the allegations seriously and appointed an independent law firm to review them. The report concluded that the accusations of bribery were substantially inaccurate and found no evidence to support the claims that the company supported or sponsored any intimidatory action against individuals or groups in the DRC.

We have been encouraging the company to improve their stakeholder dialogue, as well as its environmental and social management systems and reporting through our engagement. Owning its shares has provided us with a voice to promote change within the company.

We continue to monitor the company and its progress closely.

Kind regards,

Jessica Ground

Global Head of Stewardship

Réponse
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Auteur: Legal & General

At LGIM we take our stewardship responsibilities seriously and devote significant resource to ensure our clients’ assets are protected and enhanced over time. We take an active approach to stewardship, using our scale as a global investment manager to influence company and market behaviours. In doing so, we strive to achieve positive societal impacts in the belief that it will create more sustainable long-term value.

If we believe changes are needed at a company, we will communicate this privately during our engagements or publicly, if necessary, by voting against the company at annual general meetings. In 2018, LGIM has voted against UK directors more than any other large asset manager...

More specifically on environmental issues, LGIM has also taken the unusual step of voting against company directors specifically due to their management of climate-related risks. LGIM has also supported more environmental shareholder proposals compared to other large asset managers.

Many thanks for your commitment to a transparent process.

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Non-réponse
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Non-réponse
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28 September 2018

Silchester did not respond

Auteur: Silchester

Silchester declined to comment.

Article
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Auteur: Global Witness

Revelations that European’s money – and EU-based investors – play a key role in funding projects linked to human rights abuses, land grabs and large-scale environmental destruction, are unfortunately far too common place...

Our new briefing paper draws on previous Global Witness exposés to highlight the devastating impact of harms caused by predatory natural resource projects on communities around the world and the role that some EU-based investors have played in supporting them.

This includes case studies involving European investments in:

  • Oil exploration in Africa’s oldest national park
  • A mining project in India which sparked violent protests
  • Deforestation and land grabbing in Asia and Africa ...

The EU’s landmark Action Plan on Financing Sustainable Growth claims to ‘reorient private capital to more sustainable investments’ and mainstream sustainability across investors’ risk management. This is a major step forward.

But while strong on rhetoric, the Action Plan lacks the substance to truly tackle the social and environmental harm caused by the financial sector...

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Rapport
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6 September 2018

Indecent Exposure