By Sophia-Marie Mascia
To link human rights - an issue so hard to quantify - to investment, it’s necessary to shift the way we think about capital market dimensions. Financial intermediaries must move from focusing on two dimensions - risk and return - to three dimensions - risk, return, and impact. Promoting matters of human dignity in investment portfolios have the potential to increase efficiency, embolden company reputations, assure long-lasting relationships with stakeholders, avoid potential risk and liability, and create a shared pool of societal cultural wealth.
The Corporate Human Rights Benchmark Ltd’ published a methodology and a set of guidelines to encourage greater transparency and evidence-based advocacy.They aim to clear the blurred lines between main actors in human rights abuses: suppliers, supply chains, and business partners in agriculture, textiles, and extractives industries. CHRB weight company performance in each sector regarding factors like responses to serious allegations and human rights due diligence.
CHRB argues that if a business’ purpose is to serve society, respecting human- rights should be a competitive advantage. Initiatives like CHRB Ltd. give firms like Domini, the information to ensure protecting human dignity is a core objective of the corporations in which they invest. Domini, in particular, publishes its proxy voting guidelines to allow its shareholders to hold them accountable for the positions taken on their behalf.
The merger between increased transparency of issues and investors commitment to a better world I believe is what will drive change in the future.