Fund managers back internet human rights principles

SRI fund managers and index houses including the UK’s F&C Investments and US-based Domini Social Investments, Trillium Asset Management, KLD Research & Analytics, Boston Common Asset Management and Calvert have thrown their weight behind a new collaborative initiative with NGOs and academics to promote freedom of expression and privacy among internet providers and IT companies. The move to create the Global Network Initiative follows investor concerns with companies such as Yahoo!, which has been put on a watch-list by the Swedish government AP pension buffer funds over violations of freedom of expression in China by disclosing user information about a journalist that led to his imprisonment. The principles, signed by companies including Microsoft, Yahoo! and Google, include commitments to establish greater transparency with users, assess human rights risks and challenge violations in countries where they operate and providing whistle-blowing mechanisms through which violations can be reported. Karina Litvack, head of governance & sustainable investment at F&C Investments, said:
“Information and communication technology (ICT) companies face increasing scrutiny of how they manage human rights-related risks in challenging conditions that are often not of their own making. The principles come at the right time and provide a valuable body of best practice to help companies address these concerns. We encourage all telecommunication and internet companies to sign up to the initiative and use the principles and supporting tools as part of their internal controls for managing these business risks.”However, one US fund manager, Napa, California-based, Harrington Investments, criticised the Global Network Initiative as: “meaningless noise” and said it would be submitting binding bylaw amendments at the annual general meetings of Google, Yahoo, Cisco, Sun Microsystems, Oracle and Microsoft in an attempt to force the companies to set up specific internal human rights committees. John Harrington, president and chief executive officer of Harrington Investments, said: “Over my career I have seen countless voluntary codes of conduct come and go, usually with no discernable improvement on the issue at hand. Protecting human rights is a fiduciary duty of every corporate director of every publically traded corporation in this country. Any agreement to address this issue must include legitimate mechanisms for monitoring and enforcement. Meaningful change will only come about when shareholders, the owners, amend the bylaws to force boards of directors and management to accept human rights responsibilities as fiduciaries – or when governments change the law. Until either or both of those things happen, corporations will continually be sued under Alien Tort Claims and shareholders will lose money because of reckless, weak, or ignorant directors and managers.” Harrington said it would presenting the bylaw resolutions on human rights at the annual meetings of Sun Microsystems and Cisco Systems on November 5 and November 13 respectively, then at the Microsoft annual meeting in Seattle on November 19.
Link to Global Network Initiative