Embedding Human Rights into Private Equity: Challenges and Possibilities

With the exponential growth in sustainable investment and ESG funds, we see changes in the public equities market where publicly traded companies are having to assess and address their impacts on people and planet.  The same cannot be said for private capital.

The UN Guiding Principles on Business and Human Rights establish that all business enterprises, including financial institutions, must respect human rights throughout their business activities by undertaking human rights due diligence to embed respect for rights. Driven by three macro developments – privatization, financialization, and state capture – capital is increasingly shifting to private markets, which poses significant challenges for human rights defense, corporate accountability, and public interest work, according to a new book by Empower entitled “Runaway Train.” 

This webinar explored the causes and effects of the shift to private capital and demonstrate that change is possible. For example, Amnesty International has recently undertaken research to raise awareness about the impacts of venture capital investments in the tech sector. According to the report, not only have venture capital firms not implemented adequate human rights due diligence on their investments, but they are reinforcing the lack of diversity within the sector. A briefing by Oxfam explored human rights abuses across company supply chains in the food and beverage sector, many of which negatively impact the rights of local communities, and outlines investor contributions to a resilient food system. The webinar closed by showcasing a venture capitalist who is pioneering an alternative model: responsible venture capital that factors ESG considerations into investment decision-making.  

Speakers:

• Benjamin Cokelet, Empower, will provide a brief overview of the challenges of ensuring private capital investments respect human rights. In May 2021, Empower published the book "Runaway Train: The Perilous and Pernicious Path of Private Capital Worldwide".
• Michael Kleinman, Amnesty International, will discuss the failure of venture capital invested in the ICT sector to undertake human rights due diligence. Amnesty recently published a report, Risky Business: How Leading Venture Capital Firms Ignore Human Rights When Investing in Technology.
• Sharmeen Contractor, Oxfam, will speak on private equity investments in land and the impact on communities in the food and beverage sector. Oxfam recently published a briefing, Food for Thought: Investing in a Sustainable Food System, outlining a path forward for investors to build a resilient food system.
• Hannah Leach is a Partner at Houghton Street Ventures and a co-Founder of VentureESG, whose aim is to help the VC sector recognize the importance of ESG and to provide resources to make ESG considerations a standard part of portfolio and fund management. She will highlight good practices for responsible VC. 

Watch the recording here: