What Does Investor Practice on Human Rights Look Like in 2026 and How Could it Improve?
Rory Sullivan, Pins Brown and Faith Ward
A deep dive into leading investors’ policies and practices on human rights revealed that many now have strong commitments to human rights, and are dedicated to effectively implementing these commitments. However, our research also showed that investors are inconsistent in how they report human rights-related outcomes and impacts.
Between 2023 and 2026, Chronos helped Brunel Pension Partnership shape a meaningful approach to human rights in line with Brunel’s strategic priorities. This involved developing and implementing a structured process for understanding, identifying, prioritising and managing human rights issues. The process included extensive discussions with Brunel’s investment teams to ensure that the tools developed were useful and appropriate, and provided the data and insights needed to effectively incorporate human rights-related considerations into investment research and decision-making processes.
As part of this work, we reviewed the guidance produced by organisations such as the Principles for Responsible Investment (PRI), the Investor Alliance on Human Rights, the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact on investors and human rights. We also reviewed the human rights practices and disclosures of leading asset owners and asset managers to learn what good practice looks like across the investment management community.
What did we find?
1. Investors have a range of reasons to act on human rights
The reasons investors present for acting on human rights include, but are not limited to:
mitigating investment risk,
supporting the delivery of long-term investment returns,
protecting the investor’s social licence to operate,
supporting more sustainable business practices,
respecting international human rights standards, and
promoting sustainable, inclusive societies.
These motivations are important as they shape and define the actions these organisations then take to address human rights within their operations. For example, those organisations that frame human rights primarily in financial terms run the risk of neglecting or underplaying those issues that have lesser direct financial impacts. Similarly, a focus on near-term (or immediate) risks and impacts, may lead to longer-term implications being downplayed
2. There are many areas where leading asset owners and managers are doing a good job
First, industry guidance is clear, consistent and developing in a rights-supportive way.
Second, leading asset owners and asset managers generally have clear, strong commitments to human rights. We were particularly struck by how many explicitly reference the UN Guiding Principles, by how many present their commitments in a tone of voice which is strongly supportive of the spirit of human rights protection, and by how many explicitly state that protecting and respecting human rights is consistent with delivering enduring financial returns.
Third, many provide clear evidence that their policy commitments are being translated into practice. For example, they provide evidence of internal communication, capacity-building, training and stakeholder engagement, examples of how they integrate human rights into their investment decision-making processes and examples of how they engage with companies, policy-makers and standard-setting bodies on human rights issues. In many cases, our sense was that more is taking place than a strict reading of their policies would imply, with human rights policies often acting as an ‘activity floor’ rather than an ‘activity ceiling’.
3. There are areas where improvements are needed
Despite these positive signs, there is limited consistency in how asset owners and asset managers describe their policies, practices and processes on human rights or report on the outcomes that they achieve from their efforts on human rights. The consequence is that it is difficult to build a coherent picture across the investment industry as a whole.
We also identified two specific areas where action is needed. First, even among leading investors, while governance responsibilities are generally clear at a high level, these responsibilities tend to be much less clear in terms of day-to-day responsibilities and accountabilities. Second, there are significant and important variations in policy scope. For example, for some asset managers we found that all business relationships were covered whereas for others the stated scope only covered their investment processes.
The art of the possible: Can we advance the human rights agenda via stronger consolidated and coordinated action?
Our review of the practices and processes of leading asset owners and asset managers shows that it is possible for investors to adopt and effectively implement robust human rights processes. We are seeing a maturing of human rights approaches, with clear progress on the development and implementation of systems and processes, and a growing focus on outcomes and impacts.
Our main concern is that there is a lack of consistency in implementation and in the outcomes being sought. While it may make sense for an individual organisation to choose its own path, it risks fragmentation across the industry, potentially diluting the effectiveness of investors’ efforts. In our view, leading asset owners and asset managers could play a key role here by encouraging consistency on the scope of policies (specifically that they should cover the breadth of organisational activities), by encouraging organisations to have clear responsibilities and accountabilities for human rights, and – as proposed by the Investor Initiative on Human Right Data (see Note 2) – by encouraging consistency in reporting.
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For more on our work on Human Rights visit here or contact: pins.brown@chronossustainability.com
Notes
1. Rory Sullivan is CEO, Chronos Sustainability, Pins Brown is Specialist, Human Rights, Chronos Sustainability and Faith Ward is Chief Responsible Investment Officer, Brunel Pension Partnership Limited.
2. The Investor Initiative on Human Rights Data is a collaborative initiative where institutional investors work together to advance the corporate human rights data environment, thereby enabling investors to systematically incorporate human rights data into their investment decision-making and their active ownership. See, further, https://www.churchofengland.org/sites/default/files/2024-03/ii-hrd-terms-of-reference-14mar2024.pdf
3. Photo by Hanna Zhyhar on Unsplash
