Investing
July 10, 2018
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Quick Facts
Assets of institutional investors, OECD countries, 2013
Value of North American college and university endowments
Center commentary
As asset owners and shareholders, public pension funds and university endowments are in a unique position to influence companies’ social, environmental, and human rights practices.
The pressure of demonstrating strong quarterly earnings to investors can cause companies to forgo long-term human rights and sustainability objectives. A conversation is now emerging about how fiduciaries – public and corporate pension funds, sovereign wealth funds, endowments, and foundations – can practice “ethical investing.” Ethical investing encourages fiduciaries to encourage respect for human rights, the environment, and other sustainability factors in their investments. Yet there is little consensus on how to define and measure ethical investing practices and insufficient comparative data about company performance on human rights.
The paper outlines how to improve measurement of companies’ social
(labor and other human rights) performance
In March 2017, the Center published Putting the ‘S’ in ESG: Measuring Human Rights Performance for Investors, an in depth study examining 12 leading frameworks for assessing companies’ social practices and impacts. It finds that current measurement is overly deferential to companies to voluntary disclose the efforts they undertake on a wide range of poorly defined “social” activities, rather than measuring their real-world effects.
Writing and Advocacy
- O’Connor, Casey, and Sarah Labowitz. “Putting The “S’ In ESG: Measuring Human Rights Performance For Investors.” New York: NYU Stern Center for Business and Human Rights, 2017.
- O’Connor and Labowitz. “Investors need better ways to find companies making a difference.” MarketWatch, March 10, 2017.
- Posner, Michael. “Divestment Campaigns.” New York Times Sunday Dialogue, May 2, 2015.
- Posner, Michael. “Universities Can Put Their Economic Clout to Good Use.” Chronicle of Higher Education, November 17, 2014.
- Posner, Michael. “Universities Can Lead in Transforming Human Rights.” Speech, University of Michigan, October 10, 2014.