Investor ESG guide on private security and human rights
This investor guide highlights that private security-related adverse human rights impacts are common and typically include excessive use of force, unfair working conditions and sexual exploitation. As fiduciaries, institutional investors are obligated to identify and mitigate these potential adverse impacts.
Please login or join for free to read more.
OVERVIEW
This guide highlights the potential risks that private security companies pose to human rights due to unfair working conditions, excessive use of force, and sexual exploitation. Private security personnel can be both perpetrators and victims of human rights abuse as rightsholders. The complexity of the investment industry’s value chain already obligates investors to identify and mitigate potential adverse impacts on human rights as fiduciaries.
The guide recommends ten recommendations for investors to take as part of their own human right responsibilities. Recommended actions include communicating human right expectations of portfolio companies that use private security, screening potential portfolio companies for high-security risks and implementing proactive engagement with portfolio companies, assessing portfolio companies’ ability to manage security-related impacts, responding to security-related human rights incidents, and assessing the portfolio company’s risk management’s maturity.
Investors can support the recommendation by implementing a policy commitment to respect and embed human rights throughout their portfolio’s business and by conducting human rights due diligence to identify and address adverse human right impacts associated with portfolio companies. They may also demand a third-party verification of human rights compliance from private security companies to ensure oversight of the risk management process and regular disclosure of risks associated with the PSP.
Overall, this guide outlines potential risks to human rights caused by private security companies and outlines recommendations for investors to address the issues proactively and improve the human rights performance of their portfolio companies.