Ruta SRI and labour standards

SRI and labour standards

Many pension funds, investment managers and other institutional investors apply engagement or screening techniques including on labour standards and human rights. In the UK it is estimated that the value of socially responsible investment (SRI) assets rose from £23 billion in 1997 to £225 billion in 2001, while in the USA SRI assets reached $2.29 trillion in 2005, up from $2.16 trillion in 2003.

Policies on labour standards vary in scope and rigour according to local market attitudes, customer preference, trustee views, availability of information or government policy. Investors concerned about labour standards tend to adopt one of three approaches: exclusionary screening (avoiding investments in companies with poor labour compliance or operating in countries with low standards), positive selection (choosing companies with a good record on employee relations or labour compliance ahead of others), engagement (dialogue with companies identified with non-compliance to raise standards). Combinations of these approaches are also utilised.

AT UN level the United Nations Finance Initiative UNEPFI holds regular events and published research. Various industry associations exist to promote SRI and offer a variety of research, events, members toolkits and newsletters. These include:the European Social Investment Forum (Eurosif), the UK Social Investment Forum (UKSIF) and its associated body Just Pensions, the US Social Investment Forum and the Association for Sustainable and Responsible Investment in Asia (AsrIA)

In addition, various SRI indices exist which take into account labour standards policies and compliance, among them FTSE4Good, the Dow Jones Sustainability Indices (DJSI) and the Domini400 Social Index.

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