Shareholder advocacy stands out as a crucial means for investors to drive positive change related to Transformative Governance (TG) and, consequently, Sustainable Development Goal (SDG) 16. This can involve advocating for initiatives such as country-by-country tax reporting within the framework of the Global Reporting Initiative (GRI), particularly pertinent in sectors like big tech where multinational companies may exploit lower tax rates in foreign jurisdictions.
Recent examples include shareholder resolutions filed at Microsoft and Amazon, urging for transparency in tax disclosures, albeit with some resistance.
Collaboration with industry bodies and civil society can augment investors' understanding of the nexus between TG and a conducive business environment, facilitating improvements in due diligence processes. Institutional investors, spurred by entities like the UN Global Compact and the Principles for Responsible Investment (PRI), are increasingly active in stewardship practices, prioritizing action in high-risk sectors or regions.
The PRI's frameworks on human rights and investing with SDG outcomes provide guidelines for aligning investment strategies with societal goals. While private investors may have less stringent oversight regarding human rights and governance, their significant influence, especially in technology sectors like AI, underscores the importance of civil society engagement to ensure responsible investment practices.
Public statements by investors can also serve as a form of advocacy, as seen in instances like the 2021 Investor Statement on Human Rights and Business in Myanmar, urging companies to uphold human rights standards amidst political turmoil.