EUROPE - A report by engagement provider GES has revealed very few companies operating in Burma are prepared to deal with the human rights risks that they are exposed to. The Burma Benchmark Report found that more than half of the rated companies even lack the most basic requirement, a company-wide human rights policy.

Out of 29 companies, only three indicate that they apply human rights due diligence or heightened risk awareness to their operations in the country
 
GES' research director Anna Zetterström Bellander said: "This generally poor level of preparedness does not only pose a risk for potentially affected people, but also leaves the companies exposed to legal, financial, operational and reputational risks.

She said that together with pension fund companies Folksam, KLP and LD, GES was "taking an active role" in the debate on responsible investment.

"We have already received substantial response from the companies on the report results, which will be interesting to follow up on in meetings that we are planning," Zetterström Bellander said, adding that she was hopeful other investors would soon join in actively engaging with Burmese companies.

Meanwhile, with three weeks to go before its launch at UN's Rio+20 sustainable development conference, the Natural Capital Declaration has gained the support from the European Sustainable Investment Forum (Eurosif) and the Social Investment Forum Japan (SIF Japan).

The Natural Capital Declaration is a commitment by financial institutions to work towards developing a methodology to integrate natural capital considerations into financial products and services. 

Natural capital refers to the materials and information within ecosystems. Much as an investor will use financial capital to generate profits, natural capital is the yield goods or services ecosystem. For example, a forest or a population of fish will provide a future flow of timber or food.

With two dozen endorsements so far from countries including Australia, China, the Netherlands and the US, it comes at a time when there are more serious challenges to tackle, according Mariko Kawaguchi, chief executive and secretary general of SIFJapan.

"In order to steer the global economy in the direction of a more sustainable system, incorporation of natural capital into economic activity is crucial," Kawaguchi said. "The role of reallocating global resources in a sustainable manner is a challenge for financial institutions"

She added that awareness of the issues in Japan had resulted in the Principles for Sustainable Finance, a new initiative endorsed by 180 financial institutions.
 

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