PRI Stewardship Initiative Targets Social Issues, Human Rights

Proposed platform to support investor engagement with corporates and policymakers.

The UN-convened Principles for Responsible Investment (PRI) is to launch a new initiative to help investors to address human rights and social issues through their stewardship activities.

It will follow steps laid out in its recent paper Why and how investors should act on human rights.

“Investors have a key role to play in addressing social issues and human rights. The initiative will act as a platform that can encompass a broad range of social issues, which will allow investors to prioritise the most severe human rights risks and outcomes within their stewardship activities,” said the PRI’s statement on the launch.

The platform will showcase a range of activities, it added, including collaborative investor engagement with companies, along with potential further escalation where needed. “The PRI will also support investor engagement with policymakers and other stakeholders to make progress on the overall goal,” it said.

The platform, which will focus on social issues, is similar in vein to investor-led engagement initiatives, such as Climate Action 100+, which aims to reduce the greenhouse gas emissions of the most carbon intensive corporates globally.

It is currently unnamed and the title will be unveiled in 2022 when it is launched.

The PRI is currently inviting signatories to express their interest in joining. “In the new year, the PRI will provide these signatories with further information on the initiative (such as the sector and company list for engagement) and invite them to formally apply to join the initiative as an endorser, lead investor and/or collaborating investor,” it said.

PRI said the initiative will “seek change through the use of investors’ influence over portfolio companies”.

This will be done through a focus on companies’ adoption of the United Nations Guiding Principles on Business and Human Rights (UNGPs) by investors. Investors will be scrutinising firms for areas including appropriate disclosure; the level of alignment of their political engagement activities with their human rights responsibilities; and their progress on specific human rights issues within their operations and/or value chains that are seen as the most severe risks to people.

“Each company will be expected to fully implement the UNGPs and align their political engagement, e.g. lobbying, positions and activities to the UNGPs,” said the PRI. “Additional company-specific expectations will also be developed by identifying which human rights issues are most severe within each company with input from technical experts and affected stakeholders.”

The PRI added that investors were key to the proposal and their engagement with corporates and public policymakers was necessary to pursue the objectives. “It is recognised, for example, that the solution to the issues of privacy rights, hate speech, misinformation and electoral manipulation brought on by big tech companies require not only forceful company stewardship by investors but also global, regulatory solutions,” it said.

The PRI said it would also promote mandatory human rights due diligence legislation, robust accountability mechanisms and financial regulation that recognises human rights as an area of responsibility through local PRI policy representatives.

Endorsers and participants in the new initiative will be required to be a PRI signatory and make a public commitment to respect human rights recognising the responsibilities set out in the UNGPs and implement (or commit to implement) a human rights due diligence programme within a year of joining the engagement.

The participant role will be open to applications from PRI signatories who are asset owners with capacity to engage, investment managers, or engagement service providers who have a specific mandate to engage with companies on behalf of an institutional investor or investors,

To join, participants must also agree to sign the initiative public sign-on statement and agree to the terms of reference for the initiative.

The PRI said it expected to begin engagement with approximately 30 companies.

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