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Minimum Safeguards

Guiding Your Investments: Enhancing Responsible Investing with the Taxonomy's Minimum Safeguards

The Taxonomy we have developed goes beyond just financial metrics; it deeply integrates Human Rights and governance considerations at its core. This approach ensures that investments made under the Peace Bond or Peace Equity instruments are not only profitable but also ethically and socially responsible.

International Standards as Our Foundation

Our current framework is built on internationally recognized instruments, including:

  • The International Bill of Human Rights
  • UN Covenants on Civil and Political Rights and on Economic, Social, and Cultural Rights
  • The International Labor Organization Declaration on Fundamental Rights and Principles at Work
  • The OECD Guidelines for Multinational Enterprises (including the environmental chapter)
  • The United Nations Guiding Principles on Business and Human Rights (UNGPs)

These instruments form the "minimum environmental and social safeguards" that guide our investment decisions.

Adapting to Emerging Global Standards

Looking ahead, we're ready to integrate new standards as they emerge:

  • The proposed EU Corporate Sustainability Due Diligence Directive, once enacted, will become a part of our minimum safeguards. That said, the use of the Peace Finance Standard provides the assurances that the heightened due diligence and meaning stakeholder engagement criteria under the directive are met.
  • National initiatives like the German Supply Chain Due Diligence Act and The Netherlands Responsible and Sustainable International Business Conduct Act are also included as they come into force.

The AAAQ Framework: A Tool for Responsible Provision of Goods and Services

We also embrace the AAAQ (Availability, Accessibility, Acceptability, and Quality) concept from the International Covenant on Economic, Social and Cultural Rights:

  1. Availability: Ensuring sufficient quantity of a good or service.
  2. Accessibility: Making sure goods and services are affordable, physically reachable, non-discriminatory, and accompanied by relevant information.
  3. Acceptability: Providing goods and services in an ethically and culturally appropriate manner.
  4. Quality: Guaranteeing safety and adherence to internationally recognized standards.

Applying AAAQ in Our Investments

The AAAQ concept is not just a guideline; it is a practical tool for measuring impacts, screening for 'Do No Harm' (DNH) principles, and establishing minimum social safeguards. In our Taxonomy, investments that inherently benefit peace and meet these AAAQ criteria are considered eligible.

Investing with a Conscience

By integrating these safeguards and the AAAQ framework, we ensure that our investments contribute positively to society and the environment, aligning with our commitment to responsible investing.

  1. Assess Peace Potential: Identify how investments can contribute to peace, considering their direct, indirect, and 'Do No Harm' impacts [drop down expanding].

Understanding Peace Contributions in Investments

When we talk about investments contributing to peace, it's essential to understand how these contributions are made and their alignment with broader peace objectives. Here's a simple breakdown

  1. Aligning with Peace Objectives Without Causing Harm

Holistic Contribution: Every activity should contribute to one or more peace objectives. But it is not just about adding to peace; it is equally important to ensure these activities Do Not Harm any other peace objectives or overlook minimal social and environmental safeguards. This approach aligns with the Principle of Dual Materiality, emphasizing both positive impact and harm prevention.

  1. Types of Peace Contributions

Indirect Positive Contributions: These happen through the processes and outputs of a business. While they might not be the primary goal of a business activity, they play a crucial role in reducing factors that drive conflict or in enhancing factors that promote peace.

Direct Positive Contributions: This is when the main outputs of your investment directly address and mitigate key factors driving conflict or strengthen factors that foster peace. These contributions are intentional and directly linked to the core business activities.

Making a Meaningful Impact

In summary, whether your investment's contribution to peace is direct or indirect, the key is to ensure that it aligns with peace objectives and upholds the highest standards of social and environmental responsibility. By understanding and applying these principles, investors and businesses can make a significant and positive impact on peace and stability.

  1. Track and Enhance Peace Impacts: Use Peace Enhancing Mechanisms (PEMs) [link to 1.4.1.3 PEMS] and risk mitigation strategies [link to 1.4.1.4 risk mitigation] to boost positive impacts and ensure compliance with the Taxonomy.
  2. Report on Impact: Showcase how your investments contribute to peace, highlighting the effectiveness of PEMs and 'Do No Harm' measures.

Full guidance on the use of the Taxonomy can be found here [link to the full guidance document]

© Finance for Peace 2023