UPM-Biofore-Magazine-3-2016-EN

Rights of protection for the child

Right to health

Examples of internationally recognized human rights Source: Modified version of original Shift diagram

Right to education

UPM is committed to full compliance with the United Nations Universal Declaration of Human Rights. This includes rights such as freedom of thought, opinion, expression, religion and the right to assemble peacefully, as well as the right to freedom from any discrimination based on race, age, nationality, wellbeing of its employees. It aims to empower and engage employees at all levels of the organization through responsible leadership. UPM endeavours to promote the observance of human rights as defined by the UN both in its own operations and those of its stakeholders. The use of forced or child labour is not tolerated under any circumstances. It is up to everyone to make their workplace inspiring, diverse and inclusive. All employees are required to do their utmost to ensure a safe, healthy workplace for everyone working at UPM. Employees are additionally encouraged to take an active role in their personal and professional development and growth to ensure UPM’s future business success. UPM RESPECTS PEOPLE AND HUMAN RIGHTS gender or sexual orientation. UPM promotes the health and

Rights to freedom of thought, conscience and religion

Right to form and join trade unions and the right to strike

Rights to liberty and security of the person

Right to freedom of association

Right to work

Right to an adequate standard of living

Right to enjoy just and favourable conditions of work

Right to equality before the law, equal protection of the law, and rights of non-discrimination

Tiina Landau

Rights of protection of the family and the right to marry

Right to privacy

explains Tiina Landau , Senior Advisor for Responsible Investments at Ilmarinen. “We expect companies to comply not only with national legislation but also with the principles of the UNGlobal Compact, including international labour and human rights, anti-corruption and freedom of association,” she explains. “In our analysis we also look at issues such as excessive working hours, poor wages andmistreatment of migrant workers.” Active ownership About a year ago Ilmarinen adopted its own sustainability rating system. “Currently we have sustainability ratings for over 3,000 companies. From the system, our portfolio managers immediately see the sustainability risks related to those companies. Our rating systemhas four categories: There are some 600 companies in the two lowest categories,” says Landau. “If we suspect that a company is violating regulations and we know themwell, we can then have a direct conversation with the company. Another option is to contact them through our service provider together with a larger investor group to find out

whether we need to react to the issue.” The primary objective of active ownership is for companies to pursue a responsible course of action. “Selling ownership and blacklisting is the last resort, and only used if engagement with the company does not lead to the preferred outcome,” adds Landau. Complying with international norms The most serious cases are companies that have systematically violated norms or caused significant damage through their operations. “Violations are easier to confirm if companies have caused themdirectly with their own actions. Finding evidence that a company is responsible for the wrongdoing of suppliers is more difficult,” notes Landau. “If discussions with a company result in an engagement process, our goal is to ensure that the undesirable activity ends and that similar violations are not repeated in the future,” she adds. “Responsibility requirements have become much tougher lately. It’s no longer enough for companies just to follow local rules – they have to comply with international norms as well.” 

Rights of minorities

“It is all about having channels for workers and community members to express their concerns about working conditions and other company impacts. They mustn’t live in fear of raising their voice. That really is at the heart of all of this.” Blind spots in audits Supplier audits play a role, but audits alone are an insufficient method of knowing exactly what is going on. “Many recent factory collapses or cases of modern slavery have happened in factories that had been audited previously,” notes Triponel. “We are moving towards a new system of audits that is less of a compliance tick-box approach andmore a way of looking at how to work with business partners to develop their human rights risk management processes.” Actions with different stakeholders, including peer companies and governmental authorities, can also play an important role in tackling the root causes of systemic human rights issues facing companies. Triponel admits that there is still a lack of visibility inmany companies’ supply chains, whether concerning migrant flows, sub-contracting of labour or poor environmental standards that then negatively impact on people. “There is still a lot of work to be done, but it is encouraging to see the level of uptake of the UNGuiding Principles by companies.”

THE STRATEGIC SIDE OF ETHICAL INVESTMENT Why is sustainability becoming strategically important for institutional investors? Ilmarinen Mutual Pension Insurance Company explains its sustainability rating system.

Beyond just looking for a reliable return on investment, Finnish pension company Ilmarinen also takes into consideration environmental, social and governance (ESG) issues when making investment decisions. “We have three sustainability principles guiding our investments. Our key values are in compliance with international norms, active ownership and integration of sustainability analysis into investment decisions,”

Source: UPM Code of Conduct

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