annual review indst 2024 public - Flipbook - Side 23
Annual Review 2024
A Transparency: Companies should publicly disclose
comprehensive information regarding their business
in, or related to, the high-risk region. This should
include a summary of their enhanced human rights
due diligence using the UNGPs reporting framework,
their current and proposed actions, and a summary of
relevant governance.
Our underlying approach and commitment to the UNGPs has
been relatively unchanged, but we may emphasise certain
aspects on a case-by-case basis depending on the region in
question and the nature of a company’s involvement.
As part of our public policy advocacy and collaborative
work, EOS participates in working groups related to human
rights. These include knowledge sharing on high-risk
regions engagement approaches and collaborative
engagement, such as through the Investor Alliance for
Human Rights and the Principles for Responsible
Investment’s Advance initiative.
In recent years regulatory changes have provided increased
protection for human rights, with some jurisdictions banning
the import of goods produced with forced labour.2 New
reporting requirements such as the EU’s Corporate
Sustainability Reporting Directive and Canada’s Modern
Slavery Act will require companies to be more transparent
about their human rights practices. While these changes
represent positive progress in the management of human
rights risks and impacts in the private sector, they also
increase the need for companies to proactively identify and
mitigate their human rights impacts to avoid legal and
financial penalties.
Identifying high-risk regions
EOS identifies priority high-risk regions to address in
engagement with companies on an ongoing basis. These
have included Myanmar, Western Sahara, the Xinjiang Uyghur
Autonomous Region (XUAR), and Ukraine. We may also
engage on a region for individual companies where a major
controversy arises. We had 15 open objectives related to
human rights in high-risk regions as of the end of 2024.
2
In 2024, companies and investors faced significant pressure
from stakeholders to divest from operations and holdings
potentially exposed to the Israel-Gaza conflict or heightened
tensions in the West Bank.3 EOS undertook outreach to a select
group of companies, including some of those identified by the
United Nations Human Rights Council (UNHCR), to clarify their
exposure and discuss human rights within the framework of our
approach. We sought evidence that companies had rigorous
human rights practices that applied across all business activities
and that they were effectively managing associated risks.
In total, we engaged with 22 companies regarding their
exposure via correspondence and virtual meetings. We will
continue our dialogue with these companies on this issue and
their wider human rights performance.
Voting season shareholder proposals
Shareholder proposals relating to high-risk regions appeared
at several companies in 2024. We recommended support for
proposals regarding the impacts of products reaching highrisk regions at companies such as Microchip Technology,
RTX, and Texas Instruments.4 We also recommended support
for proposals examining companies’ business activities in
high-risk regions, such as at JPMorgan Chase & Co and
Mondeléz International.5
EOS may also recommend voting against directors
responsible for human rights oversight at companies where
performance is poor. For example, in 2024, we recommended
a vote against a director at a major food processing company
due to concerns that risks of child labour were not being
properly addressed. We expressed this rationale and
expectation to the company through engagement. We also
did this at a major aerospace company due to an apparent
failure to oversee product quality and safety issues, which
resulted in adverse human rights impacts. Our human rights
voting policy has been applied in the context of high-risk
regions in previous years.
Implementation of the Uyghur Forced Labor Prevention Act, Products made with forced labour to be banned from EU single market
Companies Are Getting Caught in the Israel-Hamas War’s Crossfire, Some European firms retreat from Israel-linked finance amid war pressure
4
MCHP 2024 Proxy Statement, RTX 2024 Proxy Statement, TXN 2024 Proxy Statement
5
JPMorgan Chase 2024 Proxy Statement, Mondelez International Inc 2024 Proxy Statement
3
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