Business relationship responsibilities in the context of institutional investors

The OECD has previously concluded in a paper on the scope and application of business relationships in the financial sector that a relationship between an investor and investee company including a minority shareholding can be considered a "business relationship " under the OECD Guidelines.

Hence investors, even those with minority

shareholdings, may be directly linked to adverse impacts caused or contributed to by investee companies as a result of their ownership in, or management of, shares in the company causing or contributing to certain social or environmental impacts. In other words, the existence of RBC risks (potential impacts) or actual RBC impacts in an investor’s own portfolio means, in the vast majority of cases there is a “direct linkage” to its operations, products or services through this “business

relationship” with the investee company.

As a result, investors are expected to consider RBC risks throughout their investment process and to use their so-called “leverage” with companies they invest in to influence those investee companies to prevent or mitigate adverse impacts. However, investors are not responsible for addressing those adverse impacts themselves.

In some limited circumstances, adverse impacts caused by companies associated with an investment will not be directly linked to an investor’s own operations, products or services (e.g. their own portfolio). For example, in circumstances where an investor buys shares or other equity in a joint venture (JV) company,

it will have an investor-investee business relationship with that JV company.

However, if one of the JV partners is causing/contributing to adverse impacts (e.g. forced labour) through a separate, unrelated project (i.e. which the investor has no investment, ownership or other connection with), the investor is not directly linked to the forced labour impacts through its investment in the JV. However since there may be a risk of similar behaviour in the projects operated by the JV company, if the investor becomes aware of this situation, it should trigger ‘heightened ongoing due diligence’ on the JV.

附件:

1. Responsible business conduct for Institutional Investors from OECD.pdf (2 MB)