Carolina Almeida Cruz

Objective: The purpose of the research was to evaluate the commitment and due diligence measures directed at human rights in a sample of the largest international and European asset management companies, under OECD guidelines. Theoretical Framework: According to the OECD, companies can impact most internationally recognised human rights. However, there is a lack of studies that directly assess the human rights due diligence in investment companies. Method: A documentary and qualitative analysis of 45 investment companies was applied. Five key performance indicators were created to measure human rights commitment and due diligence practices such as disclosure of human rights policies, cascading of compliance/obligations to investees, due diligence before and during the investment and collaboration with industry and non-industry initiatives. All companies were classified and rated according to these criteria. Results and Discussion: This research reveals that there is a dichotomy between recommendations of human rights integration in investment and actual commitment and compliance, indicating that only a minority of companies were compliant and committed to considering human rights in their investment. Research Implications: The results provide an initial benchmark of the state of the commitment towards human rights in the investment sector, allowing for further investigations to be conducted to assess the development of this dimension of ESG and CSR, particularly in this sector Originality/Value: The analysis consisted of accessing and evaluating the public information of the larger investment firms from an individual investor perspective, which provides an innovative view of human rights awareness and compliance in the investment sector.

Given the rising demand for more transparent, consistent, and comprehensive non-financial information in investment, there is a need to provide more reliable, meaningful, and measurable ESG metrics, in a way that most frameworks cannot. Most established frameworks face difficulties and challenges in providing sustainability information to investors in a significant way, lacking in areas such as transparency, reliability, consistency, materiality, and particularly, their focus on the “S” dimension of ESG. The present article purposes to review the challenges associated with several frameworks and to present a solution to overcome them, by giving an overview of a new and innovative software as a service framework, ESG Maturity. This software presents itself as a solution for both reporting companies and their respective investors, by providing both with an assessment of the ESG maturity index of the companies, and delivering a report containing relevant initiatives, strategies, and action plans tailored to each one of them, within different sectors, dimensions, and geographic areas and consequently, their financial and non-financial implementation impact. ESG Maturity is considered a possible answer to the challenges in ESG reporting, having the potential to revolutionize the way companies report their non-financial information and how investors receive it.