Investors and the ESG blind spot

Upholding civic freedoms as part of geopolitical corporate responsibility
Research paper Updated 4 July 2023 Published 3 July 2023 ISBN: 9781 78413 577 5 DOI: 10.55317/9781784135775
Demonstrators carrying banners and Israeli flags gather in central Tel Aviv to protest against the government's planned changes to the judicial system.

Business and civil society benefit equally from strong civic institutions (such as an independent judiciary and media), the rule of law and the freedoms of expression, association and assembly. These elements of accountability are all critical to stable, profitable and sustainable business environments in which companies thrive and economies prosper.

Civic space has been shrinking in democratic and autocratic countries alike for some time. The reduction of civic space presents not only political but also legal, ethical, reputational and financial risks for investors and companies. But, for investors to demonstrate geopolitical corporate responsibility and match their rhetoric on social purpose with action, there needs to be a shift in awareness, culture and process.

This research paper identifies the risks to investors associated with shrinking civic space and recommends actions that investors, regulators and civil society organizations can take to better identify and mitigate those risks.