If you missed it last month, the Investor Initiative on Human Rights Data (II-HRD) published their “Guidance for ESG data providers on assessing company non-compliance with, and breaches of, international human rights norms.” II-HRD “convenes investors who agree on the need for better human rights data to effectively manage investments in the long-term interests of clients and beneficiaries. As primary users of ESG data, II-HRD members recognise these challenges in the ‘norms breach’ space. Working with international experts in business and human rights, the II-HRD have created this set of Principles for assessing company non-compliance with BHR standards.”
“There are multiple and divergent approaches taken by Providers to assess whether a company is in breach of, non-compliant with, or violating international norms (‘norms breach products’). Investors use these norms breach products in different ways but suffer from a lack of transparency and consistency regarding Provider’s approaches and outputs. Providers have a clear role in enabling investors to identify and act on human rights risks and impacts, which supports both investors’ fiduciary duties and human rights responsibilities. The issues with divergent approaches, transparency and consistency introduce doubts about the quality of the products, create inefficiencies and additional costs for investors, and make it more difficult for investors to meet their own responsibilities to respect human rights…
The Guidance details twenty-one research principles for assessing companies in relation to breaches of (or non-compliance with) international norms, such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. We recognise that assessing companies on norms breaches is a complex and nuanced issue and the research principles reflect this…
While this Guidance is primarily for engaging with data providers, we hope investors will also find it useful when conducting their own human rights due diligence, assessing companies on environmental, social and governance risks, or setting rules about the inclusion or exclusion of companies from funds.”
Setting the tone, the Principles start with their Golden Rules:
- Do not equate assessments under different BHR standards
- Be specific about which norms a company is being assessed against
- Be transparent about the research approach
- Disaggregate the research outputs
- Enhance, rather than reduce, research related to high-risk contexts
Members can learn more about human rights risk in supply chains here.
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Practical Guidance for Companies, Curated for Clarity.
