Our Responsible Investment overlays
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While protecting and fulfilling human rights is a legal obliga- tion and the responsibility of governments, it is widely recog- nised that all businesses have the potential to impact human rights. Poor management conflicts with the long-term interest in promoting a responsible and sustainable development and may impact companies’ license to operate. We expect companies to comply with internationally recog- nised human rights principles and to prevent and manage their impact on human rights. Our expectations apply both to the investee companies themselves and to their supply chains. At NAM, we screen all of our holdings for breaches of interna- tional norms, identifying companies that are allegedly involved in breaches of international laws and norms on human rights and labour standards. In addition, our target for 2023 is that all investee companies in funds managed by NAM will be assessed against the minimum safeguards in the area of human rights, in line with the EU taxonomy.
We engage companies we are invested in on different human rights-related topics – such as digital rights protection in ICT companies, pharma pollution related to drug manufacturing and the right to clean water, labour and workers’ rights abuses at industrial cobalt mines in the DRC, and on the Corporate Human Rights Benchmark (CHRB) assessments. We engage with companies either independently or through collaborations and initiatives such as the Investor Alliance for Human Rights. We also engage on policy level. One example of this is the Investor Statement in Support of Mandated Human Rights and Environmental Due Diligence in the European Union, which issued recommendations for robust legislation on mandatory human rights and environmental due diligence.
Engaging on Corporate Human Rights Benchmark (CHRB)
The CHRB measures the human rights performance of the world’s largest publicly listed companies in sectors with high human rights risk. At NAM, we integrate the CHRB assessment results into our ESG analysis and ownership activities. This information enables us to assess the effectiveness of a company’s human rights risk management and track progress. Against the background of new regulatory initiatives requiring investors to demonstrate that their investments do no significant harm this, becomes even more important. In 2021, the Investor Alliance, CHRB’s founding investors – APG, Aviva, and Nordea and 208 other investors representing $5.8 trillion in AUM shared an investor statement with 106 companies who had scored zero on their Human Rights Due Dili- gence processes, some of them having done so for four years in a row. Of the 106 companies, 34 responded (representing a 32% response rate). Of those responses, 2 came from automotive companies, 5 from ICT companies, 8 from the apparel sector, 10 from agricultural product companies, and 10 from extractive companies. In addition to engaging collaboratively with other investors, we also engage with a smaller number of companies indepen- dently on CHRB. We identified a number of companies where we saw a need to escalate our engagement efforts. We sent notices to five companies informing them that unless they could provide us with new information about their human rights performance, we would consider voting against relevant board directors. We will follow up on these companies during 2022.
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