NEW investment criteria of the Church Commissioners in relation to human-rights abuses and social inequality are set out in a report that commits the Commissioners to holding corporations to account on how they will “best understand and address their links to inequalities by meeting their responsibility to respect human rights”.
Agreed internally this month and published on Wednesday of last week, the report, Integrating Human Rights into Responsible Investment: A systemic approach to deal with systemic risks, seeks to “communicate to corporate management that the approach taken to respecting human rights is a financially material issue for all corporations”. It is a component of a collaborative initiative with Aviva Investors and Scottish Widows.
The Commissioners’ social-themes lead for responsible investment, Dan Neale, said: “During 2023, we worked towards a more systematic approach to human rights issues in our portfolio, with the aim of mitigating risks to broader society — and risks to long-term returns.”
Last yr, revisions to the Commissioners’ Responsible Investment Framework guidance brought in sections specifically related to human rights for the primary time. They at the moment are the idea for engagement with asset managers on investment and due-diligence decisions.
In line with the UN Guiding Principles on Business and Human Rights, the Commissioners’ report affirms that “businesses — including investors — have a responsibility to respect human rights. This means they need to avoid infringing on human rights and appropriately address antagonistic human rights impacts that they cause, contribute or are linked to.”
The Commissioners will seek to influence the decision-making of investors through a scientific voting policy, in addition to calls to enhance the standard of accessible data on human-rights positions and performance. They may even proceed to set baseline criteria for company selection, which incorporates assessing the reporting standards and the performance of corporate management.
Where they change into aware of negative or antagonistic investment decisions, or management failures in transparency and reporting, they may vote against them, or push for further clarification, the report says. Environmental, social, and governance reporting is now widespread, although has yet to change into internationally consistent or regulated.
The report says that the Commissioners haven’t commissioned bespoke research on human-rights data across the entire portfolio, “which could be very costly”. Instead, they’re looking for to enhance the “human rights data environment”, and hope that their initiative could have a “catalytic effect in the broader market”.
The Commissioners have £10.3 billion invested globally. Of this, 70 per cent is either in or through the UK and North America, their Stewardship Report for 2022 says. A spokesman confirmed that no disinvestments had been made up to now, and that “this just isn’t a disinvestment initiative.”
The move, nevertheless, may set the Commissioners on a collision course with quite a few Commonwealth member states and Anglican Communion nations where, for instance, homosexuality is unlawful and presents a touchstone human-rights issue. Last June, the Archbishop of Canterbury expressed “grief and dismay” over the Church of Uganda’s support for the Ugandan government’s Anti-Homosexuality Act (News, 12 June 2023).
The Archbishop of Uganda, Dr Stephen Kaziimba, rejected Archbishop Welby’s intervention as an expression of “opinions about matters around the globe that he knows little about first-hand”. He also pointed to the Gafcon Kigali statement (News, 21 April 2023), which rejects the Archbishop of Canterbury as an Instrument of Communion.
The development also led the diocese of Bristol to review its decades-long link with the Church of Uganda, which included financial support (News, 02 August 2023).
The NGO Human Rights Watch considers LGBT rights to be “integral elements of our selves [which] should never result in discrimination or abuse”. Of the 63 countries that criminalise same-sex acts, 31 are in Africa.
Describing themselves as “a responsible investor”, the Commissioners consider that “climate change, nature loss and social inequality each represent systemic risks that may likely cause significant disruption to the economy, wider society and the economic system, in turn representing risks to our long-term investment goals.”
