Advance initiative releases its assessment framework, based on the World Benchmarking Alliance’s Social Transformation Framework.
There is scope for the UN-supported Principles for Responsible Investment’s (PRI) human rights stewardship initiative Advance to extend to policy engagement, according to Nabylah Abo Dehman, Head of Stewardship, Social Issues and Human Rights at the PRI.
Advance launched at PRI in Person in Barcelona last year and will see investors engage with key companies in the metals and minerals and renewables sector on human rights and social issues. Among the focus companies named by PRI are mining giants Anglo American and Rio Tinto, along with German energy group RWE, world number two in offshore wind power and Europe’s third-largest renewable energy supplier.
The approach taken by investors will vary across sectors regions, but participants will set three high-level expectations for focus companies: implementation of the United Nations Guiding Principles on Business and Human Rights, alignment of political engagement with their responsibility to respect human rights, and progress on the most severe human rights issues in their operations and across their value chains.
Although the investors will concentrate their attention on focus corporates initially, Dehman also said there was space over time for policy engagement on human rights with governments as part of Advance. “The sector-level engagement might lead to some policy engagements on specific issues in given jurisdictions. We haven’t identified those just yet, but there is scope for that.”
The assessment framework for measuring the effectiveness of engagements has been released by the PRI last week. It will be used to track the performance of all target companies based on minimum standards captured in the World Benchmarking Alliance’s (WBA) Social Transformation Framework.
The WBA Social Transformation Framework is designed to assess the most influential companies in the world across three categories: human rights, decent work, and ethical conduct.
The assessment framework for Advance will also monitor allegations and/or controversies connected to target companies and their response, and track progress relative to specific company objectives and severe issues.
Dehman said the assessment framework reflects “the spirit” of the Advance initiative where it will be transparent on all of its work, such as publishing the methodology for sector and company selection.
“The assessment framework is very much aimed at being transparent as to how we’re going to be tracking investor activities within the initiative, and how we’re going to be tracking company progress,” she said. “We want to keep the investors in the initiative accountable to stakeholders and companies in focus as to how they’re going to be measured.”
Dehman said that Advance planned to encourage investors involved, on a voluntary basis, to release their high-level objectives for target companies.
“We’ll see how much of uptake there is for that. This came from the signatory advisory committee, and we were very pleased at this willingness to be more transparent and provide more modularity and demonstrate a relationship between engagement and changes in company practices.”
Advance will track benchmarks for each focus company annually, starting with a baseline from Q1 of 2024, and the first public report on progress in Q1 2025. The performance of focus companies will be aggregated and incorporated in an annual progress report at the sector level, recognising that potential improvements are likely to be the result of multiple factors, including outside the control of the Advance initiative. Individual case studies will be included to illustrate best practices and demonstrate examples of concrete improvements against the objectives of the initiative.