5 reasons why investors will take you to task over human rights

Investors are increasingly scrutinising companies’ human rights practices, making it essential for businesses to understand and address these concerns proactively. Here are five reasons why.

1. They must disclose it. New laws and regulations are pushing large investors to collect evidence of robust human rights due diligence from companies. If you can’t show it, expect scrutiny. 
2. It threatens returns. Human rights failures drive financial risk: rising litigation exposure, costly investigations and claims and management distraction.
3. It hits reputation. NGO and media probes can trigger consumer backlash, share price shocks and investor exits—as seen in high‑profile labour-abuse cases.
4. It disrupts operations. Workforce unrest, talent flight, business delays and forced‑labour trade bans (e.g., the EU Forced Labour Regulation) can block market access.
5. Stewardship has teeth. Leading asset owners (e.g., NBIM, Church Commissioners) expect UN Guiding Principles on Business and Human Rights (UNGPs) alignment—and use voting, engagement and exclusions when companies fall short.

So what can companies do now?

• Engage investors early on expectations and data needs.
• Put human rights on the board agenda and risk register.
• Implement risk‑based due diligence: map suppliers, assess salient risks, engage workers and suppliers and enable remedy.
• Show progress over time; perfection isn’t required, credible action is.

A strong, risk-based approach to human rights is now essential for companies looking to maintain investor confidence and long-term business success.

Want tailored advice and help with what your company should be doing now? Contact kerry.stares@crsblaw.com or your usual Charles Russell Speechlys contact.