Finance, investors, and human rights

Investors finance business enterprises and can be critical players in the growth and strategic direction of a company. Financial institutions play the important role of facilitating investment and advising businesses on their strategic growth. This chapter provides teachers of business and human rights with foundational background on the intersection of finance, investors, and human rights. It introduces the high-level architecture of the value chain of capital flows connecting investors, financial institutions, and companies, and describes ways the investment community can influence corporate human rights performance. It covers key concepts for understanding various actors’ roles, including fiduciary duty and “materiality.” It considers the leverage investors can exercise to encourage businesses to avoid and to address human rights risks and shareholder proposal strategies to promote better business practices.