Ethos Foundation and 22 institutional investors with CHF 395 billion in assets under management, are asking the members of the Swiss lower house to support legislation for mandatory human rights due diligence which will be discussed in parliament on Thursday 13 June.
Ethos Foundation and 22 Swiss and foreign institutional investors, who represent assets under management of CHF 395 billion, sent a statement to the members of the lower house. As long-term shareholders in the companies targeted by this legislation, the signatories call on parliamentarians to back the introduction of mandatory human rights due diligence by supporting the counter-proposal to the responsible business initiative. The planned legislation will clarify expectations for companies in the field of human rights and the environment and bring Switzerland's legislative framework into line with recent international developments.
"As institutional investors, we have a responsibility to consider whether the companies we are investing in have negative impacts on human rights and the environment and, if so, to prevent and mitigate these impacts", explains Vincent Kaufmann, CEO of Ethos Foundation. “Reputational and operational risks related to human rights breaches have a significant negative financial impact on the companies in which we are shareholders".
Adopted by the lower house in June 2018 before being rejected by the upper house in March, the counter-proposal is to be discussed again on Thursday 13 June in the lower house. For the signatories of the declaration, the proposed counter-proposal reflects a balanced approach and will contribute to enhancing the attractiveness of Swiss companies to investors as well as Switzerland's appeal as a global financial center. It is also perfectly aligned with Switzerland's long humanitarian tradition and its commitment to the protection of human rights around the world.
The disclosure and processes required by the mandatory due diligence under the counter-proposal would thus give investors the opportunity to better analyze how companies manage and mitigate their human rights and environmental impact, thus enabling institutional investors to fulfill their fiduciary duty towards their beneficiaries.
This statement comes at a time when investors, particularly institutional investors, are increasingly inclined to take environmental, social and governance (ESG) criteria into account in their investment strategies. According to a recent study by Swiss Sustainable Finance (SSF) at the end of 2018 CHF 717 billion managed in Switzerland took into account sustainability factors, an increase of 83% over the previous year.