Climate change means the world is moving: are responsible investors ready?

Human Rights

As Hurricane Ian and a drought on the Mississippi reshape US climate politics and cause millions of Americans to rethink where they can safely live, investors are waking up to the reality of the central role that migration will play as a global climate adaptation strategy. According to ‘Groundswell’, a World Bank study on climate change and migration, weather-related climate impacts mean that between 44 and 216 million people could migrate within their country of residence by 2050. Many others be moving across international borders this decade and beyond as climate-related extreme weather impacts worsen. Yet investors are only just beginning to come to terms with human rights and migration as themes that will define the next decade of climate action, adaptation, and any attempt at a  transition to a more resilient, climate secure economy. Where working age climate migrants and others are able to live in coming decades will also define the economic growth trajectory of aging G7 economies. Investors will need to wake up to these realities.

Private security firms, prisons as human rights risk multipliers in a decade of increased mobility

For investors in listed and private prison operators who have grown their migration incarceration business lines, the next few years will be risky. As G7 governments, led by the UK government’s Rwanda deportation programme, take a fortress approach to migration policy, companies involved in these programs, and their investors, will face increasing reputational and legal risks. This applies to logistics and tech firms, from Microsoft to Thomson Reuters, who are growing their business lines serving government migrant detention, surveillance, and deportation programs. One of the  largest private prison operators in the US, logistics firm MTC is set to take over Australia’s notorious Nauru island migration detention facility. For privately held incumbent operator Canstruct International, it has been a lucrative contract: according to official figures, the cost to hold a single refugee on Nauru in 2021 was more than $4.3m annually. While the contracts for incarcerating migrants may be seen as useful short term dividend-boosters, investors may think twice about these types of association. And as more ESG ratings firms and investment research analysts integrate human rights risk, companies with links to human misery and the mistreatment of migrants may become less attractive investment targets.

(By the way, other target populations are concerned, and investing in the expansion of digital surveillance and database systems to include migrants and other groups, regardless of their criminal status (i.e. pre-emptively tracking people who have no criminal record and are not suspected of any wrongdoing), raises a broad range of ethical questions. For example, Wired Magazine recently flagged risks for investors in Flock Safety, Motorola Solutions, and peer firms providing license plate tracking tools to US law enforcement and other groups. The Wired investigation analyses how these systems, already used to track migrants, could soon be used by police and anti-abortion groups to track and prosecute individuals seeking an abortion procedure across state lines.)

Privacy, GPS tagging and the interception of migrants at sea

Across the Atlantic, the UK’s migrant GPS tagging programme, known as Electronic Monitoring Services (EMS), is run by Capita under a contract with the national Ministry of Justice. The programme has been critiqued by Privacy International as an excessive invasion of privacy and as posing human rights risks. Their investors have yet to speak up. Airlines and marine logistics firms are meanwhile involved in the migrant interception business. Aeolian and CWind, normally providers of seaborne services to the offshore wind sector, have been brought in to help the UK Home Office intercept people in the English Channel. And, according to the UK government Parliamentary research service “states are responsible for protecting human rights when people come within their jurisdiction or control. This could be when boats reach territorial waters, or when a state rescues or engages with vessels and their passengers…”

New technologies, a shifting global order and a shifting climate bring new questions and risks to the fore. Join us to discuss how investors are tackling these questions – please register for our November 15th COP27 global migration & climate action update webinar here. Vibeka Mair will moderate a discussion with  Emma Pullman, Capital Stewardship Officer, BC General Employees Union (BCGEU); Marcela Pinilla, Director, Sustainable Investing, Zevin Asset Management; and Barbara Pomfret, Independent Migration & Investment Researcher, on the risks and opportunities of investing in companies in the Border & Surveillance Industries, COP27 updates on the links between climate strategy and migration policy, and what’s on the agenda for the 2023 proxy season.

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