By Paul Verney
March 28, 2024
Credits @FFHR.CZ
The Church Commissioners, Aviva Investors and Scottish Widows have today formally launched their human rights data initiative, revealing the names of the eight initial targets for engagement.
Among the companies identified by the Investor Initiative on Human Rights Data (II-HRD) are big ESG data providers: MSCI, Sustainalytics (Morningstar), Moody’s, Refinitiv (LSEG Group), Bloomberg and RepRisk.
Influential proxy advisers Glass Lewis and Institutional Shareholder Services (ISS) also make the list.
According to the II-HRD terms of reference, the eight were selected due to “their broad coverage and use by investors.”
The target list is a subgroup of the 20+ data providers engaged last year by a group of 15 investors, led by the Church Commissioners, Aviva Investor and Scottish Widows, who set out their requirements regarding the availability, quality and use of corporate human rights-related data.
That investor group included Fidelity International, CCLA, Sarasin & Partners LLP, Cardano, Nordea and the Church of England Pensions Board.
Among those from the initial engagement cohort not included in the first II-HRD target list are Hermes Equity Ownership Services (EOS), CDP, FTSE Russell and S&P Global.
According to an op-ed from the lead investors in October, the group wrote to the 20+ firms in Q1 2023, calling on them to “expand the ambition of their research on human rights (beyond controversies, norms breaches and the presence of policies) into their products and services, and on proxy advisers to integrate human rights considerations into voting recommendations for both management and shareholder resolutions”.
When asked why the initial eight had been selected, Dan Neale, social lead at the Church Commissioners, told Responsible Investor that they had been prioritised as they “were seen as the most influential and critical to engage with.
“But we will explore how to make sure the wider ESG data and proxy voting industry is aware of our position.”
As part of the launch of II-HRD, investors are invited to participate in the initiative either as a member or endorser, with a deadline for applications set for the end of April.
‘Preferably’ be public
Members must commit to the terms of reference, which include three agreed positions, such as agreeing “to use our collective influence to ensure service providers meet our need for high quality human rights data at scale in order for us to effectively manage investments in the long-term interests of our clients and beneficiaries.”
The document states that members will “preferably” be public about their involvement in the initiative but adds that those that wish to be anonymous “will be accommodated”.
Endorsers back the initiative but without committing to the terms.
Between now and 2025, the II-HRD has three high-level objectives:
Improve the depth and breadth of corporate human rights data available to investors via data providers, with a focus on the universal coverage of listed companies’ efforts to implement human rights due diligence and their policy level commitments to respect human rights.
Improve the depth and breadth of corporate human rights data available to investors, via proxy adviser voting policies and advice.
Generate industry-wide alignment on the principles of assessing the presence of and response to corporate ‘norms breaches’.
Members can volunteer for one or more of the following roles: Focus Group Coordinator, Lead Investor or Collaborating Investor.
Focus Group Coordinators lead and report (quarterly) on progress of the groups dedicated to the first two objectives.
Lead Investors, like other collaborative engagement initiatives, take responsibility for the engagement with a focus ESG data provider or proxy adviser.
Finally, Collaborating Investors support the work of focus groups and engagements.
Neale told RI that the initiative already has some members and endorsers but that the funds “plan to wait until after the deadline has closed before disclosing any additional names”.
Source: responsible-investor.com
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