Investors push for global disclosure standards on human rights

A coalition of 21 influential investors, collectively managing assets north of $1 trillion, is urging the ISSB to place human rights at the top of its priority list. Convened by ShareAction’s Workforce Disclosure Initiative, the group’s letter comes at a time when the international investment community is increasingly sensitive to matters of human rights and sustainable business practices.

Earlier this summer, the ISSB published its first two sets of standards. These standards not only define expectations for how corporations convey their sustainability risks but also address the intricacies of climate change disclosures. With the potential to shape regulatory landscapes across the globe, they symbolise the ISSB’s dedication to fostering a culture of transparency in ESG reporting.

Now, as the IFRS Foundation seeks feedback on its forthcoming priorities, it finds itself with another opportunity to redefine the contours of ESG standards.

A call for unified disclosures

The letter to the ISSB serves as a testament to the urgency felt by the international investment community. These investors, including Impax Asset Management, EQ Investors and Rathbone Greenbank advocate for a consolidated framework – one that seamlessly integrates corporate disclosures on worker rights and the measures corporations adopt to champion human rights across their value chains.

The motivation behind this call is clear: the appetite for comprehensive, high-quality workforce data among investors is burgeoning. Companies with the stain of human rights violations on their records are finding themselves increasingly unattractive to prospective investors. This heightened sensitivity is attributable, in no small part, to the revelation of human rights violations that came to the fore during the Covid-19 lockdowns. As the labour market limps towards recovery, the clamour for enhanced worker protection and equitable treatment has become deafening.

The convergence of labour and human rights

In its approach, the IFRS Foundation has thus far treated labour and human rights as distinct entities. However, the investors’ letter challenges this bifurcation. The call is for a more holistic approach that intertwines standards on human rights, human capital, and social value. By endorsing this interconnected approach, the ISSB would send a clear message to corporations: the expectation is not just for isolated disclosures but for a strategic alignment of human rights-focused corporate strategies.

For asset managers and stewardship professionals, the trajectory of this discourse is clear. Human rights are not just an ethical imperative; they are becoming a non-negotiable aspect of investment decision-making. As the world turns its gaze towards institutions like the ISSB, the hope is for a future where human rights stand at the epicentre of ESG standards and corporate transparency. The ball, as they say, is in the ISSB’s court.

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