Financial institutions have a duty to investigate if the companies they invest in are at risk of being exposed to involvement in human rights violations. Reliable information is essential here, yet in many countries civil liberties are restricted to some extent. This comes at the expense of social debate. For this reason, APG and four other Dutch financial institutions investigated how to strengthen human rights risk assessment in countries where reliable information is scarce.
An open civic space means that citizens are free to organise and express their views, for instance. This enables them to assert their rights and participate in decision-making that affects their lives, say the organisations – which, apart from APG, included ING, ABN Amro, Robeco and Morningstar Sustainalytics – in their report. A healthy civic space also means that journalists can report freely on government corruption, workers are able to call for safer working conditions and members of (indigenous) communities are allowed to demonstrate to protect their water sources, for example.
According to the report, respecting these rights is essential for ensuring a stable and sustainable environment in which businesses thrive and the economy grows. In a growing number of countries, however, civic space is under pressure. This increases risks for businesses, as they find it difficult to determine whether human rights are respected in the places where they operate. Accordingly, the title of the report, based on a quote from a participant at one of the sessions that led to its creation, is No news is bad news.
International standards, such as the UN Guiding Principles on Business and Human Rights, compel companies to do research (due diligence) into risks that their activities and those of their supply chain pose to people and the environment. Companies stand to gain a lot from this. By proactively and constructively engaging with human rights activists, trade unionists and members of indigenous communities, inter alia, they gain a better understanding of the risks their activities pose, and how to manage those risks. This enables companies to act more responsibly and offers them the opportunity to create long-term value.