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Not necessarily. A client cannot tell from a fund name, ESG rating or general responsible-investment report alone whether their particular portfolio is linked to a serious human rights violation. The investment manager should be able to explain the policy and due-diligence process it applies, the risks it identifies, and what it does in response. Portfolio-specific evidence is needed to establish exposure or a connection to a particular harm.
What does it mean for investment money to be linked to a violation?
People often use “funds” to mean several different things: owning shares or bonds issued by a company, providing capital directly, or investing in a fund that holds those assets. Those facts can show a financial relationship, but they do not by themselves establish that a client caused, contributed to, or was otherwise connected to a specific human rights harm. That assessment depends on evidence about the investment, the company’s conduct, the harm, and the investor’s role.
A controversy alert, a company operating in a high-risk country or sector, or an ESG score can flag an issue for investigation. None is conclusive proof that a violation occurred or that a particular client knowingly financed it. A manager should describe what is known, what remains uncertain, and how it responded rather than treating a rating or headline as a verdict.
What should an investment manager be able to explain?
The Principles for Responsible Investment (PRI) describes investor responsibility through three connected elements: a policy commitment to respect internationally recognized human rights, due-diligence processes, and access to remedy where the investor’s connection to harm creates that responsibility. The OECD’s institutional-investor guidance likewise addresses responsible-business-conduct due diligence in investment portfolios.
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Due diligence is an ongoing process, not a one-time screening exercise. It includes identifying actual and potential adverse impacts connected to investees, taking steps to prevent or mitigate them, tracking how they are managed, and communicating actions and outcomes to clients, beneficiaries and, where appropriate, affected stakeholders and the public. The PRI’s 2023 practical guide says investors should use a methodological approach because data availability is imperfect and ESG ratings from providers can be inconsistent.
- Policy: What human-rights commitment applies, and does it cover the specific fund or mandate the client owns?
- Identification and prioritization: How does the manager look for actual and potential impacts in current and prospective investments, including through investee value chains? How does it prioritize severe risks?
- Action: What has the manager done to prevent or mitigate identified impacts, and how does it assess whether those steps worked?
- Tracking and communication: How does it monitor the investee’s response and report actions and outcomes to clients and beneficiaries?
- Remedy: If the investment is connected to harm, what process does the manager use to provide or enable access to remedy where its responsibility calls for it?
These are process questions, not proof that a manager has handled a particular case well. Clients should assess answers against the manager’s methodology, records and portfolio-specific evidence.
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What do reported investor practices show—and what do they not show?
PRI signatory reporting gives an indication of practices reported by participating institutions. The figures below come from different reporting populations and periods, so they should not be combined into a single measure or read as results for every investor.
| PRI-reported figure | What it describes | Important qualification |
|---|---|---|
| 8% of signatories, with combined assets under management (AUM) of US$13.6 trillion, take action on all pillars of the UN Guiding Principles on Business and Human Rights (UNGPs). | PRI’s 2025 reporting data on action across all UNGP pillars. | This is a reported practice figure, not independent verification of portfolio outcomes or evidence about any individual client’s holdings. |
| 32% of signatories conduct human-rights due diligence; 11% enable access to remedy. | PRI’s 2025 reporting data on those practices. | These are reported practices, not proof that a specific portfolio is free from harm or that remedy was effective in a specific case. |
| 36% of asset owners and 30% of investment managers reported using the UNGPs and/or OECD Guidelines. | PRI’s 2023 reporting cycle, summarized in a 2024 PRI report. The frameworks were applied to USD 13.2 trillion of asset-owner AUM and USD 61.8 trillion of investment-manager AUM. | The percentages refer to the respective reporting groups, not all asset owners or managers, and do not establish what any one client’s portfolio holds. |
| Around 75% of PRI signatories explicitly link responsible-investment activity to fiduciary duties in their policies. | PRI’s 2025 reporting data, as summarized on its responsible-investment introduction page. | This describes policy language reported by signatories; it does not establish the legal duties of a particular manager in a particular jurisdiction. |
These figures can help a client ask informed questions about practice, but broad institutional reporting cannot answer whether a particular account holds an exposed investment or what the manager did about it. PRI signatory data is self-reported; it should not be mistaken for an audit of a client’s portfolio.
Why can’t a rating or portfolio report settle the question?
Human-rights risks can change, and data providers may assess the same company differently. A rating is therefore one input, not a definitive measure of human-rights performance. Managers may also face scale challenges when monitoring thousands of investees or applicants, and information about conditions in value chains may be incomplete.
Context matters. The OECD points to issues such as land rights, displacement and forced relocation in some investment contexts. Their relevance depends on sector, geography, asset class and the specific value chain; their existence as risks does not demonstrate that a particular portfolio caused or contributed to them.
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Ask the manager to identify the data it uses, where information is missing or disputed, and how uncertainty affects its decisions. A credible explanation should distinguish a flagged risk from a verified impact and should show how the manager follows up.
What can a manager do when it identifies a serious risk?
The appropriate response depends on the circumstances; there is no universal rule that an investor must immediately sell or always remain invested. PRI guidance for private-market investors says human-rights due diligence should inform decisions at every stage of investment. It can shape investment selection, corrective actions in shareholder agreements and plans after a transaction.
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- Use leverage and engagement: The manager may work with an investee and relevant stakeholders to address impacts, monitor progress and escalate concerns where needed.
- Set or pursue corrective action: In private markets, agreements or post-transaction plans may provide a way to address identified risks and seek changes.
- Consider exit in context: Divestment may be considered as a last resort, but its timing and likely consequences matter. A manager that is constrained from divesting may remain invested; it should explain its reasoning to clients, beneficiaries, affected stakeholders and others as appropriate.
- Address remedy: Where the investor’s connection to harm gives rise to a responsibility to provide or enable access to remedy, the manager should explain the process it follows.
The PRI’s private-market technical guide, published 7 June 2023, says: “Human rights due diligence should be used to inform decision-making at all stages of the investment process.” That is a decision-making principle, not a promise that every identified harm will be resolved.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Questions to ask about your own fund or mandate
Ask for answers that apply to the product or mandate you actually own, rather than relying only on a firm-wide policy or a general sustainability report.
- What public human-rights policy applies to my fund or mandate?
- How do you identify actual and potential impacts in current and prospective investments, including through investee value chains?
- How do you prioritize severe risks, and what limitations or disagreements in your data sources affect the assessment?
- What actions have you taken to prevent or mitigate identified impacts, and how do you judge whether they worked?
- How do you engage with investees and affected stakeholders? What escalation steps might you take, and when might you consider exiting?
- What portfolio-specific information about exposures, actions and outcomes do you report to clients or beneficiaries, and how often?
- If an investment is connected to harm, what process do you use to provide or enable access to remedy?
When comparing funds or managers, use the same criteria for each: policy coverage for your mandate; risk-identification methods and treatment of uncertainty; prevention, mitigation, engagement, escalation and exit approaches; tracking and communication; and remedy processes. This is a way to compare governance and disclosure, not a third-party ranking of which manager has the cleanest portfolio.
What evidence would make an answer more useful?
A clear answer should connect the manager’s stated policy to the investments and actions relevant to the client. Depending on what is available, ask for the applicable fund or mandate policy, the manager’s risk-assessment method and data limitations, relevant exposure information, and records of engagement or other action. Ask how frequently information is updated and whether it covers investee value chains as well as direct holdings.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsEven detailed disclosure may not establish every link between a client’s money and an adverse impact. The manager’s response should be judged against the available evidence and its explanation of uncertainty. The sources cited here set out general investor due-diligence guidance; they do not determine the legal obligations of a particular manager under the laws of a specific jurisdiction.
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