To examine how investors might be vulnerable to other conflicts around the world, EIRIS Conflict Risk Network (EIRIS CRN) is now sharing with its member-subscribers two new spreadsheets designed to highlight how an investor could be exposed to ongoing conflicts in Yemen and South Sudan through stocks and bonds.
Conflict Risk Reports
Areas affected by conflict differ significantly from stable operating environments. The unpredictable conditions, pervasive violence, and instability leaves companies exposed to a variety of challenges:
- Operational Risk–Staff put at risk, operations being suspended, assets ceased or sustaining physical damage
- Geopolitical Risk–Sudden shifts in government policy towards business activities in conflict-affected areas (sanctions, divestment requirements, procurement prohibitions…)
- Reputational Risk–Being seen as causing, financing, or benefitting from conflict
- Legal Risk–complicity in human right violations or claims related to their role in the conflict
These are amongst the conflict risks that we address with investors and companies. We look for conflict-sensitive corporate responsibility practices in line with international principles and the avoidance, reduction or mitigation of activities that drive or perpetuate conflict by companies or those they do business with. When conducted without consideration for local conflict dynamics, a business can intensify or perpetuate a state of conflict but we also believe that conducted responsibly, business can play a constructive and stabilizing role. EIRIS CRN’s mission is to support companies and investors seeking to promote such responsible corporate practices, with a focus on long-term, sustainable commitments
EIRIS CRN works with public funds, universities, fund managers and socially responsible or values driven investors to support their diverse strategies from risk management, engagement, screening or managing segregated mandates in line with client expectations.
To address the connection between corporate actors and conflict effectively, an institutional investor constituency needs answers to certain key questions:
- Which companies are materially involved in conflict?;
- What are the risks and what steps can they take to act responsibly?
- What steps have they taken so far?
Institutional investors may then look to act collaboratively in response to the answers. EIRIS CRN addresses these needs by focusing its work on three key areas:
Research
EIRIS CRN informs stakeholders by producing comprehensive research and compiling financial data on companies materially involved in select conflict-affected areas. EIRIS CRN also informs stakeholders of the risks associated with company activities as well as suggested actions to address the conflict risk.
Company Engagement
On behalf of the network membership, EIRIS CRN engages companies directly with the goal of persuading them to adopt the responsible practices that support peace and stability in areas affected by conflict.
Corporate Social Responsibility Standards
Drawing on established principles and standards, its research, and in consultation with country experts, partner organizations, and others, EIRIS CRN may develop and advocate for specific corporate responsibility recommendations for responsible corporate behavior in select areas affected by conflict.