The modern understanding of this topic has been defined by the International Bill of Human Rights and the International Labor Organization, which together provide the most authoritative list of internationally-recognized human rights.

The International Bill of Human Rights consists of the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, and the International Covenant on Civil and Political Rights and its two Optional Protocols.

The International Labor Organization identified eight core conventions, covering the subjects that are considered as fundamental principles and rights at work.

In addition, there are materials in place that provide guidance for organizations in defining their human rights approach.

The UN Guiding Principles on Business and Human Rights, also known as the Ruggie Framework, assist states and companies in implementing the UN’s “Protect, Respect and Remedy” Framework. The Principles explicitly and clearly set out the responsibilities of businesses to respect human rights alongside the obligations of states to protect human rights. This provides a framework of responsibilities for respecting human rights in a business context, setting out clear requirements for businesses to develop:

• A policy commitment to respect human rights;
• Due diligence processes to identify, prevent, mitigate and account for human rights impacts; and
• Processes to enable the remediation of any adverse human rights impacts.

Drawing upon these Guiding Principles, in 2011 Ministers from the Organization for Economic Co-Operation and Development (OECD) updated the Guidelines for Multinational Enterprises, to include new recommendations addressing human rights.

Thus, respecting human rights is not just an issue for states and governments today. Companies from all industries have an increasing responsibility to incorporate human rights issues into their business standards, wherever and however they operate.

Corporations are not only expected to take into consideration the human rights impacts directly caused by their own activities and operations, but also those linked to a business relationship with business partners. The latter makes the determination of the appropriate action more complex, as the link is only through the business relationship. Corporations must look at human rights not only from a business risk perspective, but also from the perspective of the people impacted, the “rights-holders”.

Many of the direct human rights risks and issues faced by the finance sector are generic to all businesses, such as the treatment of its own employees. But as an investor into public and private entities and an insurer of multinational corporations from various sectors, the insurance industry also plays an active role in the global economy. Through its business relationships it has many links to potential human rights violations. Examples include the provision of construction insurance to a company allegedly involved in forced resettlement of local communities, or holding shares in a textile company implicated in child labor in its factories.

Failure to respect human rights exposes the insurance industry to reputational, legal and transactional risk. Stakeholders, including civil society and policy makers, have rising expectations of how companies should be approaching the topic and their responsibility. For example, operating in locations prone to human rights violations may invite criticism from non-governmental organizations (NGOs), as well as employees and customers. Human rights standards are increasingly being built into international agreements and local regulations. Furthermore, there is often a strong correlation between respecting human rights and the quality of the insured risks. Also on the investment side, it can be observed that investors who take environmental, social and governance (ESG) considerations into account in their investment decisions, experience improved risk-adjusted investment returns in the long term.1

The financial services industry began to address human rights concerns some time ago. The industry started this process through voluntary initiatives such as the UN Global Compact, launched in 2000, followed by the Principles for Responsible Investment in 2006 and the Principles for Sustainable Insurance in 2012.

Allianz recognizes the importance of human rights, as both a value-based and a business issue. We have been a participant in the UN Global Compact (UNGC) since 2002 and communicate on the progress we make in implementing the Ten Principles every year.

We have a responsibility to respect human rights in our various roles - as an insurer and investor, an employer, a company as well as a corporate citizen. For these dimensions we have different processes in place. However, we and the rest of the industry are still learning about this important topic, and we will continue to work on ways to incorporate it into our business.

Integrating human rights into core business

As corporate insurer and investor, we have developed a human rights due diligence process as part of our overall ESG approach, which is integrated into the broader risk management system to ensure a quick and rigorous implementation. For our due diligence we use a combination of a sector- and country approach. Allianz has developed thirteen ESG guidelines for sensitive business sectors, which include sector-specific human rights aspects, for example child labor in the manufacturing sector or forced labor in the mining sector. Thus, relevant human rights aspects are checked as part of the overall risk assessment for any insurance and alternative investment transaction in the respective sector.

In addition, Allianz has developed a watch list for sensitive countries where systematic human rights violations occur. For any business in those countries, a general human rights guideline is being applied.

When a human rights risk is identified by an underwrite or investment manager by applying the sector guideline or the overall human rights guideline, a mandatory referral process starts for further due diligence by ESG experts and the involvement of central units such as the risk and communication departments. Where an issue is detected and the (re)insurer has leverage (in a lead position or with good contact with the client/broker/ investee company), engagement is encouraged to address and mitigate the human rights risk.

If no mitigation measures exist or if leverage cannot be increased, the risk might be unacceptable. Factors which may influence this decision include the severity of the human rights violation, the significance of the business relationship as well as own values.

Respecting human rights as an employer

As an employer we respect international human rights standards for our own workforce. We apply the Universal Declaration of Human Rights throughout our worldwide operations. We are a participant in the United Nations Global Compact (UNGC) and have integrated its ten principles into our globally-binding Code of Conduct. We also respect the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises. To support employee rights, we were one of the first companies to create pan-European worker participation standards and establish a European SE Works Council under the legislation for Societas Europaea (SE) companies.

We are also a signatory to the International Labor Organization’s (ILO) Declaration on Fundamental Rights and Principles at Work, including the ILO declaration on the freedom of association and the right to collective bargaining. In countries where local law prohibits formalized unions and works councils, we respect local law but do not obstruct parallel means of association and bargaining, and we strive to act in the spirit of the UNGC principles.

Respecting human rights in our operations

As a company, we respect and apply international human rights standards for the workforce of our suppliers and promote sustainability standards in our supply chain. Our Global Sourcing and Procurement department works with current and potential suppliers. In practice, this means ensuring that all suppliers abide by the environmental, social and governance (ESG) standards outlined in the Allianz Code of Conduct and our Purchasing Principles. Both the Code and the Principles are aligned with International Labor Organization (ILO) standards and the principles of the United Nations Global Compact, which cover human rights, labor standards, environmental protection and anti-corruption. Allianz is also committed to compliance with the Modern Slavery Act in the UK, both from the perspective of our UK business and the interactions of our wider Group.

Fostering human rights as a corporate citizen

As a committed corporate citizen, we also support projects and initiatives that foster human rights. Our international network of 14 Allianz-affiliated corporate foundations look at challenges faced by society, in order to try and safeguard the future. This network includes the Allianz Environmental Foundation, dedicated to responsible environmental management, and the Allianz Cultural Foundation, which, through the arts, works to promote intercultural dialogue and cooperation among young people.

Whilst Allianz is keen to donate to charitable organizations, it is important that recipients uphold our human rights standards. The Allianz Guidance for Donations and Charitable Memberships (Corporate Giving) stipulates that corporate giving can only be made to organizations that meet the principles set out in the Allianz Code of Conduct for Business Ethics and Compliance.