11th UN Forum on Business and Human Rights | OHCHR
Commence le 28 nov. 2022 à 10:00
Finit le 30 nov. 2022 à 18:00
Interpretation available in English, French and Spanish
Session organized by the UN Working Group on business and human rights in collaboration with BSRVersion en espanol en adjunto/ Version en francais en piece jointe
Brief description of the session:The growth of sustainable investing and “ESG” signals progress in the financial industry as investors begin to appreciate how environmental, social, and governance (ESG) issues create risks and opportunities. Yet the ESG field has been criticized, for example, for inadequate “greenwashing” strategies or for ignoring the “S”. At the same time, there is often no account taken of the value of business and human rights in developing ESG approaches. As investors and stakeholders navigate these issues and seek to ensure the societal benefits of ESG, it important that a human rights-based approach to ESG investing is considered and that impacts on people are put at the centre of these approaches. This session will shed light on the content and scope of the human rights-based approach to investment and how it contributes to elevating the voice of rights-holders in investment contexts.
Key objectives of the session:The session aims to:
- Clarify the key difference between ESG and human rights-based approaches to investment;
- Demonstrate the real-world impact of investment activities on human rights;
- Provide some guidance on how investors can integrate a human rights approach into investment decision-making and stewardship, with a focus on meaningful stakeholder engagement as part of their human rights due diligence (HRDD)and enabling access to remedy;
- Promote stakeholders' understanding of the different types of leverage that could be used by institutional investors to promote respect for human rights and enable access to remedy, as a way to strengthen their advocacy role; and
- Recommend appropriate actions to States in order to incorporate a human rights approach in finance through regulatory frameworks and public policies.
Key discussion questions:
- What is ESG investing and how is it similar or different from business and human rights?
- What are the benefits of a human rights-based approach to investment?
- Does implementing HRDD in investment decisions and stewardship involve integrating this process into ESG analysis or should it be a separate process?
- What does meaningful stakeholder engagement look like in the case of institutional investors?
- What concrete measures can investors take to exercise leverage in portfolio companies and asset managers to promote respect for human rights?
- What is the role of institutional investors in driving access to remedy for affected rights-holders?
- What measures have States taken or should they take to ensure ESG investing is aligned with investors’ human rights responsibilities and ensure investors are held accountable?
Background to the discussion:The Working Group on Business and Human Rights, together with the OHCHR, has on numerous occasions clarified on the applicability and extension of the obligation to respect the UNGPs to actors in the financial sector, reaffirming the obligation of institutional investors and banks to avoid causing or contributing to negative impacts on human rights in their activities or through their business relationships[1]. In its stocktaking on the first decade of the UNGPs, the Working Group has recognized that financial actors "have an unparalleled capacity to influence business and increase progress in the implementation of the Guiding Principles"[2] and acknowledged this issue as a central part of the agenda for the next decade.Mainstream approaches to ESG follow a common formula: investors identify material risks to business based on a limited set of pre-determined criteria and limited and/or inaccurate data. Social issue assessments can often appear simplistic, “check the box,” and of limited value. Complex issues may be reduced to limited criteria (e.g., diversity statistics), missing the intersection of environmental and governance issues, business models, business relationships and, crucially, real-world impacts of business activities on people. Even when an investor seeks to address risks, the formula often focuses on reducing financial ESG risk rather than on the cause of risk to people. For society, the result of ESG is often that business appear to check the right ESG boxes but their activities still have an adverse effect on the rights of workers, communities, customers, and others.
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