Environmental, Social and Governance (ESG) considerations are used by investors, asset managers, and other stakeholders to assess the sustainability and long-term viability of a company. ICoCA seeks to share best practices and strategies for investors to actively promote responsible business conduct and human rights within their investment portfolios.
This rating methodology aims to introduce specific indicators about security and human rights that should be integrated into the broader ESG ratings of client companies.
It has been developed (i) to enable ESG rating agencies to factor in the risks associated with private security contracting and, (ii) to assess the nature and extent of the due diligence conducted by the contracting company in identifying, preventing and reducing those risks.
Companies across all sectors use private security services to ensure the safety of their people, their activities and their assets. Private-security-related adverse human rights impacts can impact the businesses’ operational continuity, sustainability, long term value creation and short-term share price thus threatening investment returns. As fiduciaries, institutional investors, including pension plan trustees and investment managers, are obligated to identify and mitigate these potential adverse impacts.
The objectives of the Investor ESG Guide on Private Security and Human Rights are to:
1. Increase awareness of the human rights risks associated with investments in companies that utilise private security providers;
2. Support investment firms in addressing these risks throughout the investment lifecycle with ten recommended actions.
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