Protecting and enhancing value: Managing human rights risks across your portfolio

ESG considerations are fast becoming a core pillar for private equity firms in making investment decisions. A responsibility to respect human rights, as embodied in the United Nations Guiding Principles on Business and Human Rights (UNGPs), lies at the heart of the “S” in ESG. While the UNGPs are a voluntary international standard, they are commonly committed to by PE firms and the principles are being increasingly enshrined into “hard law” through mandatory human rights due diligence requirements: for example, France and the Netherlands already have such laws in place, Germany approved a draft bill last month and an EU-wide law is set to be tabled by June 2021.