Human rights in practice: driving change through investor engagement

Within responsible investment, human rights are not addressed in isolation, but as part of the broader assessment of ESG risks and opportunities and their relevance for long-term value creation.

At the same time, expectations have become more specific. Companies are expected to respect with internationally recognized human rights and to identify, assess and address their actual and potential adverse impacts on human rights, both in their own operations and across their upstream and downstream value chain. This reflects the practical reality that exposure to human rights risks often sits beyond the immediate boundaries of the firm.

Active ownership has become an important mechanism through which these expectations are met. Engagement is not treated as an informal exchange, but as a structured process: objectives are defined, dialogue is conducted with management and boards, progress is monitored, and where progress proves insufficient, the issue is escalated. Typically, these engagements extend over several years and involve repeated interaction, rather than a single point of intervention.

Human rights issues tend to enter engagement processes in different ways. In some cases, they arise through norms-based screening, where companies may be identified as falling short of expectations of international initiatives or standards. In others, they are approached as thematic priorities, particularly in areas where risks are widespread or increasing, such as labor rights, supply chain practices or digital rights.

The practical application of this approach can be seen in the way investors work with large global companies. Engagement on labor rights, for example, has focused on questions of freedom of association and collective bargaining. In one case, sustained dialogue and the use of voting rights were directed towards encouraging improved practices in relation to union engagement. Over time, this contributed to the company entering into a process aimed at establishing a framework for collective bargaining.

In other instances, the focus has shifted towards emerging areas of risk. Engagement with technology companies has increasingly addressed digital rights, including the impact of platforms on freedom of expression, privacy and child safety. Here, investors have requested independent human rights impact assessments, particularly in relation to AI and targeted advertising models. These requests reflect a recognition that human rights risks are evolving alongside business models and technologies.

Where engagement alone does not lead to sufficient progress, voting is used as part of a broader escalation framework. Voting decisions are made on a case-by-case basis, taking into account whether proposals contribute to improved transparency, stronger governance or better management of ESG risks.

For example, support has been given to proposals requesting companies to report on their due diligence processes in high-risk countries, or to commission third-party assessments of their oversight of human rights risks linked to emerging technologies. These actions are not isolated decisions but form part of a wider pattern in which voting is used to reinforce engagement.

Collaboration has also become an important feature of human rights engagement. Investors increasingly rely on shared frameworks and initiatives to strengthen their approach. The Corporate Human Rights Benchmark, for instance, provides a structured way of assessing company performance against recognized standards, and serves as a reference point for engagement priorities. Through such initiatives, investors are able to align expectations and increase leverage in dialogues with companies.

Despite these developments, the pace and extent of progress varies. Human rights issues are often complex and context-dependent, and outcomes may not be immediate. Engagement frequently requires multiple stages, moving from dialogue to escalation over time. At the same time, available data suggests that a majority of companies have improved their human rights performance over recent years, although progress is uneven across sectors and topics.

Against this background, human rights engagement can be understood less as a separate activity and more as a part of an ongoing human rights due diligence process embedded within the investment framework. It combines norms-based screening, thematic prioritization, company dialogue, collaborative initiatives and voting as complementary tools.

For ESG professionals, the focus is therefore not on whether engagement takes place, but on how it is implemented in practice—how objectives are defined, how progress is assessed, and how escalation is applied where needed.

Sources

Nordea Responsible Investments Report 2025
Nordea Voting Report January–June 2025
Nordea Human Rights Report 2025

Kristiina Kouros
Lead Expert, Social Impacts and Human Rights, Nordea

Kristiina Kouros has a PhD in constitutional and international human rights law and a broad experience in social responsibility and human rights across various sectors. She is currently the lead strategic expert on human rights at Nordea Bank. Previously, she has worked at KPMG Finland, the KPMG EMEA (Europe, Middle East, Africa) ESG Hub, and at the National Human Rights Institution under the Finnish Parliament.