Summary publication

Joint report prepared by EY and the Australian Human Rights Commission


‘Failing to consider long-term investment value drivers, which include environmental, social and governance issues, in investment practice is a failure of fiduciary duty’. Fiduciary Duty in 21st Century, UNEP Finance Initiative (2015)



President of the Australian Human Rights Commission – Professor Gillian Triggs

The Australian Human Rights Commission is pleased to launch ‘Human rights in investment’ in collaboration with EY.

The aim of this perhaps unlikely collaboration has been to explore the idea that due diligence underpinning investment decisions should include their impact on human rights.

It is true that businesses in Australia increasingly understand that to respect human rights is good for business. Research also demonstrates that there is a direct relationship between the financial performance of a business and treating its employees and customers with respect and dignity.

It is also true that, while institutional investors, such as asset owners and asset managers, take environmental, social and governance matters into account, they are reluctant to consider human rights when making investment decisions. Some investors believe they are prevented from doing by so their fiduciary duty to maximise returns to beneficiaries. Others find human rights issues too abstract and are not sure where or how to start to consider them as part of an investment choice.

You might ask what the Australian Human Rights Commission can add to this discussion. In fact, the Commission knows how important the business community is to the implementation of human rights. About two thirds of the complaints we receive, and attempt to conciliate concern, fair and non-discriminatory access to employment and to goods and services. In short, business is both a cause of many human rights breaches in Australia and the solution to protecting these rights.

The aim of this leadership paper is to debunk the myth that human rights and investment practices are incompatible. Rather, the paper illustrates how they go hand in hand. Human rights, just as any other aspect of business, can increase the value of an organisation if managed appropriately, or decrease it, if neglected. Investors’ key role to protect and enhance people’s savings to enable them to retire with dignity is not only aligned with, but also based in fundamental human rights.

We hope this paper helps investors to understand how human rights compliance can bring significant opportunities for business and complement their core investment values.

We wish to thank EY for working with us on this initiative.

Gillian Triggs


EY Climate Change and Sustainability Services’ Sydney Leader – Adam Carrel, Partner, EY

Ask investors if it is important to consider political risk in investment decision-making and they will tell you that, quite obviously, it is. Ask them instead if it is important to consider human rights in investment decision-making and some will tell you that, while human rights are important, it is not always possible or even permissible to consider them in practice. To me, this doesn’t make much sense. Human rights risks are political risks. Human rights laws and norms are largely a political construct, administered by government and civil society. Excluding human rights risks from the universe of political risks renders the latter significantly incomplete.

I believe that we are entering a period in which the link between human rights and political risk mitigation in investment decision-making will become clearer. As the politics of inequality drives increasing scrutiny towards imbalances of power, the social licence of investees – their compatibility with prevailing social norms – will become a key indicator of value and resilience. In an environment where the legality of an action or business model is not necessarily an indicator of its social acceptability, human rights will become an increasingly universal benchmark for assessing the capacity of an investee to maintain their social licence into the future.

This report seeks to confirm the permissibility and practicability of considering human rights in investment decision making, and includes the assertions of some leading Australian investors. It acknowledges that while the analysis of human rights is far from easy, there is enough commonality between leading approaches to offer a roadmap to any investor looking to further integrate human rights into their diligence and active management processes.

We thank the Australian Human Rights Commission for the opportunity to work with them on this publication and we hope you find it useful.

Adam Carrel