Top Highlights

• (ESG) to investment, as well as sustainable investment – two strategies that often overlap and are sometimes used interchangeably.
• But a recent report by the UN Working Group on Business and Human Rights shows a need for significant improvement by most investors when it comes to respecting human rights. This report, which is based on global consultations and written submissions from investors and other stakeholders, focusses on institutional investors that are using ESG approa...
• Financial materiality, or single materiality, considers how sustainability criteria (both positive and negative) can present risks and opportunities for an investor, ultimately affecting the ability of the investor to create value or generate improved risk-adjusted returns. It is characterised by an “outside-in” view of sustainability criteria, tha...
• Impact materiality considers how an investee or investor can impact people and the planet. It is characterised by an “inside-out” view of sustainability criteria, meaning it looks at how a business affects sustainability criteria. Engagement with affected groups, such as indigenous peoples, local communities, trade unions, workers and other relevan...
• Combining both concepts of materiality into a “double materiality” approach could ensure that adverse human rights impacts on people and the planet are identified, prevented, mitigated and accounted for, all in alignment with the UNGPs.

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