Just 6% of asset managers exclude investments in human rights-abusing companies across every fund in their portfolio

Most of the world’s asset managers are limiting their use of key policies that would help tackle human rights abuses, according to a new report by ShareAction.The report found that just six per cent of asset managers are excluding investments in human rights-abusing companies across every fund in their portfolio. Under half are excluding investments in these companies for their ESG funds only. The remainder of managers are either not excluding investments at all or are only doing so partially.The survey is the third in ShareAction’s four-part Point of No Returns series. It assesses how the world’s asset managers respond to social issues, including through the implementation of international conventions on human rights, agreed standards on labour rights, investor frameworks on health, and the UN’s Indigenous rights framework.

"Asset managers are failing to comprehensively protect human rights. Many people will be shocked to hear that they are not using the full set of policies at their disposal to tackle human rights abuses across the entirety of their portfolios. Asset managers should not limit consideration of investee companies’ impacts on human and labour rights, as well as public health, to their ESG funds. Asset owners must step up and demand that human rights are protected consistently across every fund.”

-Claudia Gray, Head of Financial Sector Research

One finding revealed that asset managers are only minimally considering the rights of Indigenous people when making their investments. Only ten have investment commitments in place that incorporate the UN principle of Free, Prior and Informed Consent, which gives Indigenous people and local communities a say on projects that affect them or their territories.Another finding was how asset managers are still failing to use their influence to tackle life-limiting public health issues. Millions of deaths occur each year from avoidable public health issues like lack of access to medication and vaccines, air pollution and unhealthy food. Yet most asset managers did not have commitments on any of these health-related topics, with the exception of long-standing issues such as tobacco.

Asset managers are excusing themselves for not acting on human rights and health issues by blaming a lack of adequate or sufficient data. However, the report found that asset managers are not taking the most obvious steps to address this. For example, fewer than 10 per cent of managers prioritised engaging with companies to release social data. Additionally, 40 per cent admitted that they were not asking companies to release data about their social impacts.

Asset managers are excusing themselves for not acting on human rights and health issues by blaming a lack of adequate or sufficient data. However, the report found that asset managers are not taking the most obvious steps to address this. For example, fewer than 10 per cent of managers prioritised engaging with companies to release social data. Additionally, 40 per cent admitted that they were not asking companies to release data about their social impacts. All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.