The charity investment arm of the Church of England will vote against companies in its investment portfolio that do not meet expectations on human rights.
As a shareholder, the Church Commissioners said that it wants to ensure that the companies it invests in respect the international human rights outlined in the UN guiding principles.
From next year, it will vote on whether to re-elect directors of companies that fail to meet its expectations on human rights, including those with named responsibility for human rights or board chairs.
In addition, it will partner with data providers and proxy advisors to better assess companies so that transparency across the sector can be improved.
‘We will use our vote with discretion’
According to its latest accounts, the charity manages an investment fund of £10.1bn.
It has long had a stakeholder engagement approach whereby it uses its voting powers as an investor “to drive positive change at corporates which mitigates risk and benefits both stakeholders and society”.
This approach has drawn some criticism from campaigners, who have argued that the charity should divest altogether from companies involved in industries such as fossil fuels.
In its latest announcement, Dan Neale, social themes lead for responsible investment at the Church Commissioners, said: “We expect companies in which we invest to be actively committed to prevent, mitigate and account for human rights risks and impacts in all their activities. This includes managing issues like discrimination, modern slavery, indigenous people’s rights and community impacts.
“We will use our vote with discretion, when we think it’s appropriate to signal our disapproval to the management of a company that do not appear to meet our expectations of responsible business conduct with regards to respect for human rights. Respect for human rights underpins the ‘S’ in ESG, and […] we call on all companies to manage their social risks and impacts, to improve both outcomes for people and long-term enterprise value.”