Global asset managers call on governments for mandatory human rights due diligence

LGIM, Federated Hermes, Aviva Investors and BMO among group of 101 asset management firms calling on governments to act on human rights risk management

Legal & General Investment Management, Federated Hermes, Aviva Investors and BMO Global Asset Management are among a group of 101 international asset management firms that have teamed up to call on governments to implement regulatory measures on human rights risk management

Coordinated by the Investor Alliance for Human Rights, the firms, which manage $4.2trn in assets, have issued a joint statement arguing regulatory measures should be put in place to facilitate corporate accountability for human rights harms.

Human rights due diligence is currently voluntary for companies but the groups said a mandatory reporting process should be put in place.

The statement said: “When done responsibly, business activities can be a driving force for prosperity and inclusive economic development, helping to achieve the urgent vision laid out by the 2030 Sustainable Development Agenda. Yet, far too often, businesses of all sectors and sizes may harm human rights wherever they operate, fuelling a global environment where people’s fundamental welfare and dignity remain under threat. 

“The undersigned 101 investors, representing over $4.2 trillion in assets under management, believe that all business actors have a responsibility to respect human rights and that the process of continuously conducting human rights due diligence is a core requirement for companies in fulfilling that responsibility. We also believe that governments have a duty to protect against human rights abuse by business through effective regulatory measures, particularly where voluntary corporate measures continue to leave significant gaps in human rights protections.”

See also – Asset managers back Rathbones’ Modern Slavery campaign

Signatories include LGIM, Federated Hermes, Aviva Investors, BMO Global Asset Management, Robeco, Boston Common Asset Management, CCLA Investment Management and LGT Vestra. The full statement and signatories can be viewed here.

Commenting on the move, Steve Waygood, chief responsible investment officer at Aviva Investors, said: “Aviva Investors is proud to support this statement encouraging governments to require companies to undertake human rights due diligence. The Corporate Human Rights Benchmark shows that a large number of high impact companies are failing to report on any human rights due diligence at all, despite detailed guidance produced by the United Nations almost a decade ago. A purely voluntary approach has clearly failed, creating risks for individuals, companies, and investors and harming the long term societal mandate of markets. It is important that governments introduce meaningful mandatory human rights due diligence regimes, particularly for large companies in high impact sectors. Without compulsion, it is clear that corporate laggards will continue to free-ride on the rights of others.”

Alice Evans, co-head and managing director, responsible investment at BMO, added: “Human rights due diligence enables investors to adequately identify and assess salient human right risks across our investment portfolios. Importantly, it can help companies mitigate risks to employees, communities, and other stakeholders, manage potential financial and legal risks, and, ultimately, enhance shared value creation.

“It simply makes for better-run companies. And from a global perspective, mandatory human rights due diligence brings opportunities to improve economic productivity, reduce inequalities, and improve livelihoods – all integral to achieving the UN Sustainable Development Goals.”


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...