Human rights

Human rights

In taking our responsibility to respect human rights, PGGM adopts standards such as the UN Guiding Principles on Business and Human Rights. We ask companies to identify salient human rights risks and ensure that a robust human rights policy and implementation plan are in place for their operations and supply chains.

Proactive engagement on land and labour rights

Together with our largest client PFZW, PGGM identified land and labour rights as the primary areas of focus for the human rights engagement. In 2023, we launched a time-bound human rights program with a three-year engagement cycle.  

Within this initiative, PGGM identifies high risk companies using different data sources, including commercial data providers and human rights benchmarks. We prioritize our engagement efforts to the companies that operate in high risk sectors and have high impacts. In addition, we consult relevant stakeholders, including NGOs, to identify potential high risk companies that are not flagged in the screening process due to data limitations.

To set our engagement targets, we have identified key outcomes and activity indicators that focus on tangible outcomes (e.g. number of child labour incidents remediated) for land and labor rights and on effective actions to reach those outcomes (e.g. evidence of improvements on purchasing practices and of robust human rights due diligence). This approach aims to look beyond policy commitment of a company and to focus on actual results and implementation quality. Although land and labour rights are already a subset of all human rights topics, they still cover a wide spectrum of issues. Therefore, a second level of prioritization is necessary in selecting engagement targets per company. For this, we consider multiple factors, including existing controversies, social benchmarks, and business model red flags.

The progress made by the engaged companies is guiding our dialogues and is taken into account in our voting decisions to exert leverage. Throughout the engagement program, PGGM will also actively be seeking collaboration opportunities and sector-level initiatives to engage with the selected companies, using the network of UN PRI, Investor Alliance for Human Rights, and the Platform Living Wage Financials.

OECD engagement

In the process of implementing the International Responsible Business Conduct Agreement (or in Dutch: IMVB-Covenant), PGGM created an OECD screening method. This screening identifies severe violators of the OECD Guidelines based on incidents in business operations and supply chains. This includes the UNGPs, focusing on human rights. PGGM engages with violating companies when we believe engagement can be of added value and exclusion does not initially apply. When such engagement fails, an escalation procedure will start which can eventually lead to exclusion. Our engagement asks differ based on the nature of the incidents. Often the incidents derive from implementation gaps, despite the company having a sound human rights policy in place. PGGM therefore typically asks companies to (1) improve human rights due diligence process, (2) engage on systemic issues in their supply chains, and (3) strengthen the grievance mechanism and provide access to remedy. 

Platform Living Wage Financials

Earning a living wage or living income is a human right. A living wage or living income should fulfill elements of a decent standard of living, including food, water, housing, education, healthcare, transportation, clothing, and other essential needs including provisions for unexpected events. In many countries, such level of compensation exceeds the legally required minimum wage. We therefore ask companies to share responsibilities in promoting living wages and living incomes in their own operations and in their supply chains.

As a member of the Platform Living Wage Financials (PLWF), PGGM conducts collective engagement together with like-minded peers. Over the years the platform has evaluated a set of companies in garment, agriculture, and food sector, which have significant impact on living wage and living income. Although the assessment methodology is different per sector, PLWF’s engagement strives for improvement on policy, stakeholder engagement, impact assessment, action plan, tracking performance and remediation in relation to living wage and income. PGGM includes the assessment results in its voting decisions.