The rise of “ethical investing.” I never did write about Triple Bottom Line Accounting Methodology, so far, i still think it’s the only way forward for us to have a sustainable world. Free economy with a conscience. It needs to be done.
Financial sector scrutinised on human rights-study
Thu Oct 28, 2004 07:52 AM ET
LONDON, Oct 28 (Reuters) – The financial sector is being increasingly scrutinised for its role in funding projects associated with human rights abuses, according to a study released on Thursday by two firms in the industry.
The issue is rising up the corporate agenda although there is little industry consensus on how the risks can be managed, the report, compiled by F&C Asset Management and KPMG, said.
Keys concerns for financial services companies include employee rights, security of staff, supply chain management, litigation, loan default and risks to reputation resulting from being seen to be complicit with human rights abuses committed by customers.
“We are concerned about the reputational risks lenders may incur through their association with controversial clients and projects, and the added default risk such business may bring to their assets,” said Karina Litvack, head of governance and socially responsible investment at F&C Asset Management.
The report highlights increasing instances where firms have fallen foul of these concerns.
Goldman Sachs (GS.N: Quote, Profile, Research) was criticised when it offered shares in Chinese oil firm PetroChina in the United States. Activists said the finance would contribute harming China’s environment and provided support for a country with a poor record on human rights.
Also in the United States, a number of international financial services institutions have been taken to court over their alleged past roles in the former apartheid South Africa.
The report said firms should develop a comprehensive human rights policy and communicate it to staff and their own investors.
They should also ensure that senior executives are accountable for enforcement, while developing guidelines for external reporting.
Full Article: http://www.reuters.com/advisorToolkit/newsArticle.jhtml?type=fundsNews&storyID=6643386
Yan Sham-Shackleton Online 
This is simply the self-cleansing effect of PR. If only a certain government would work according to that principle…
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Thanks for putting this up, it’s interesting. I think
it’s a start, hopefully some of the big firms pick up the ball and run with it. It will be interesting to see what happens though as generally any report that reccommends that firms should “ensure that senior executives are accountable for enforcement…” will probably get ignored as it seems many senior executives don’t like being held responsible for anything, unless i’m just being too cynical.
Hopefullly firms will be wanting to be seen as looking after Human Rights, just like corporations often worry about being portrayed as environmentally responsible. If they feel pressure from investors then changes might actually occur. Fingers crossed though!
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