The Principles for Responsible Investment (PRI) has issued a request for proposals (RfP) for research on investor data needs and challenges related to managing human rights.
According to the RfP, “obtaining meaningful source data and aggregated information and analysis allowing investors to understand the quality of due diligence of investee companies can be a challenge.”
It added that in a recent consultation, PRI signatories highlighted data as the primary challenge when seeking to manage negative human rights risks and outcomes.
To help address this, the PRI is looking for an organisation to “investigate data and information needed (both qualitative and quantitative), current data sources and markets, leading investor approaches, and to identify gaps and potential solutions relative to requirements set out in the UN Guiding Principles on Business and Human Rights (UNGPs) and emerging legislative due diligence requirements for investor[s] in a growing number of jurisdictions”.
The findings of the research will be used to support the PRI’s human rights and sustainable outcomes work programmes.
Proposals should be sent to Nikolaj Halkjær Pedersen, Senior Lead, Human Rights at PRI, (email@example.com) by close of business Wednesday December 23rd.
The RfP comes amid the launch earlier this week of a report by the UN Working Group on Business and Human Rights aiming to set out what needs to happen over the next decade to scale up the implementation and integration of the UNGPs.
The report, which followed a stock taking exercise in June to mark 10 years since the adoption of the UNGPs, said investors should “call for alignment of ESG benchmarks, data providers and reporting frameworks with the UNGPs”.
In addition, it recommended investors and other financial actors should set clear expectations that financial support and investment will only be made where “investees have in place policies and human rights due diligence processes and grievance mechanisms aligned with the UNGPs, can demonstrate performance improvements over time and provide data to support effective investor monitoring”.
It also urged investor associations and networks to set requirements for investor members to implement human rights due diligence in line with the UNGPs and hold investor members accountable for underperformance on embedding respect for human rights in investment decisions and stewardship activities.
Bettina Reinboth, Director of Human Rights and Social Issues at the PRI, told RI: “We absolutely recognise the importance of increased accountability amongst our signatories. We plan to introduce human rights questions into the PRI Reporting Framework in the near future, initially on a voluntary basis, as well as ensuring that we drive meaningful data that allows investors to manage the risks to people.”
In related news, RI understands the adoption of the EU’s long anticipated sustainable corporate governance initiative has likely been pushed back until March 2022.
The Directive, which is arguably Europe’s most serious effort to incorporate social issues into its sustainable finance drive, is expected to introduce mandatory human rights and environmental due diligence requirements across the bloc. Current plans are restricted to Limited Liability Companies, but European Parliament is pushing to extend them to cover all corporations operating in the EU internal market, including banks and investors.
A European Commission spokesperson told RI: “It is important to ensure a comprehensive preparation of this proposal, taking into account the various aspects and striking a balance between the diversity of views of the stakeholders. Quality goes before speed.”
“The precise timing is only confirmed closer to the date,” the spokesperson added.