The need to integrate human rights into sustainable and responsible investing

The increasing focus on sustainability poses new challenges for investors because they're now required to show results, not just good intentions. Here's how they can do this by considering human rights and using a narrative of change and results-based management.
human rights in impact investing

What you need to know

  • Social issues and sustainable social development are intimately linked to environmental issues but are often less in focus in the “sustainability” discourse in the investment world.
  • The impact made on societies will be gradual and over time, and it is necessary to accept and integrate this into strategies
  • Engaging stakeholders is the only way to verify that actions taken are actually adequate and not harmful.
  • Legislation is targeting investors because they have a role in society and can either further inclusive sustainable development, or seriously harm societies.
  • There are existing tools that can effectively help guide investors in their decision-making and in their understanding of social impact.
Impact Updated on January 16, 2024

The COVID-19 pandemic and heightened concerns about climate change, racial injustice, and income inequality have injected fresh urgency into the need for more sustainable investing. The pandemic’s devastating effects have laid bare how health and economic crises disproportionately affect families living in poverty, no matter where they live around the globe. More recently the conflict in Ukraine has highlighted how complex the decisions around investments, as well as around divestments, in countries violating international law can be. What are the consequences for a population if massive investments flow into a country that may violate human rights? But also what will happen to a population when divestment touches access to food and essential goods? This makes the case for integrating human rights into impact investing, particularly if investors want to ensure they’re truly using their money for good.

Results-based management and a narrative of change

The idea of sustainability-focused enterprises is that they are built themselves, help build societies, and take on these challenges. They seek to advance solutions to poverty, equity, justice, and climate change – in theory – and if prioritised and well guided, in practice – they address the gap between the increasingly crucial SDGs and current investments. It is a question to ponder: why is it that ESG investments are increasing as well as the amount needed to reach the SDGs? If the former really had an impact, the latter ought to decrease. The SDGs have not changed, but the focus on ‘sustainable’ investing has. And not all sustainable investments are necessarily supported by a framework – e.g. results-based management – around a narrative of change which is necessary for any sustainable development initiative.

About the Authors

Kristina Touzenis

Kristina Touzenis

Human rights & international law

Kristina Touzenis is a lawyer with special expertise in human rights and international law.

Connect with Kristina Touzenis

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