Most companies today understand that they have to operate in a way that gives them the social licence and goodwill to buy, manufacture and sell to citizens. This is especially true for the extractive industries, which seek to profit from a country’s natural resources. The impact of extractive operations on citizens, who ultimately own these resources, can pose a significant source of operational, legal and reputational risk. Extractive companies are also wealth generators and play an important part in most investor portfolios. This provides investors with an opportunity to engage with these companies to ensure they are resilient and contribute positively to both shareholders and stakeholders, over the long term. Recognising this, and aiming to address these risks, the PRI in conjunction with the PRI Investor Steering Committee on Human Rights, has identified a list of 50 large global extractive companies considered to be particularly exposed to human rights risks. This has been achieved by looking at current and future operating regions, existing corporate human rights policies and systems, as well as human rights incidents and allegations. Using the UN Guiding Principles for Business and Human Rights as a key reference point, the PRI researched the reporting of these organisations, and coordinated two investor-company roundtables to explore best practices and challenges in implementing those principles. Given the multitude and complexity of human rights issues extractive companies face, even leading companies are continuously striving to understand and manage these. Investors can play a key role in engaging investee companies to ensure they mitigate risks. Based on the PRI roundtables and research, the PRI in conjunction with steering committee members identified six areas for engagement, including corporate responses to human rights incidents or allegations, human rights commitment, governance and embedding respect for human rights into corporate practice. Investor engagement is most likely to trigger change when it considers each company’s specific situation. As a result, the PRI has broken down the six areas for engagement into three, namely engagement with leading companies, lagging companies, and those in between. As a tool for engagement, investors may further wish to use the case studies, questions for engagement and resources for each of the six areas that are outlined in Appendix 1.

Human Rights and the Extractive Industry: Why Engage, Who To Engage, How To Engage

Resource Key: LU32TP69

Document Type: Report

Creator:

Author:

  • Anastasia Guha
  • Olivia Watson

Creators Name: {mb_resource_zotero_creatorsname}

Place:

Institution: PRI (Principles for Responsible Investment)

Date: 2015

Language:

Most companies today understand that they have to operate in a way that gives them the social licence and goodwill to buy, manufacture and sell to citizens. This is especially true for the extractive industries, which seek to profit from a country’s natural resources. The impact of extractive operations on citizens, who ultimately own these resources, can pose a significant source of operational, legal and reputational risk. Extractive companies are also wealth generators and play an important part in most investor portfolios. This provides investors with an opportunity to engage with these companies to ensure they are resilient and contribute positively to both shareholders and stakeholders, over the long term. Recognising this, and aiming to address these risks, the PRI in conjunction with the PRI Investor Steering Committee on Human Rights, has identified a list of 50 large global extractive companies considered to be particularly exposed to human rights risks. This has been achieved by looking at current and future operating regions, existing corporate human rights policies and systems, as well as human rights incidents and allegations. Using the UN Guiding Principles for Business and Human Rights as a key reference point, the PRI researched the reporting of these organisations, and coordinated two investor-company roundtables to explore best practices and challenges in implementing those principles. Given the multitude and complexity of human rights issues extractive companies face, even leading companies are continuously striving to understand and manage these. Investors can play a key role in engaging investee companies to ensure they mitigate risks. Based on the PRI roundtables and research, the PRI in conjunction with steering committee members identified six areas for engagement, including corporate responses to human rights incidents or allegations, human rights commitment, governance and embedding respect for human rights into corporate practice. Investor engagement is most likely to trigger change when it considers each company’s specific situation. As a result, the PRI has broken down the six areas for engagement into three, namely engagement with leading companies, lagging companies, and those in between. As a tool for engagement, investors may further wish to use the case studies, questions for engagement and resources for each of the six areas that are outlined in Appendix 1.

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