Amanda Young: Hello, I’m Amanda Young and you are listening to the Aberdeen Standard Investments Responsible Investing podcast discussing all things relating to Responsible Investing.

Now today's guest is one of our senior ESG investment analysts Beth Meyer. Beth has responsibility for our human rights research and developing our approach to social issues. This includes thematic and sector research engaging with companies and collaborating with peers and industry associations. Beth also supports the research and oversight of our impactful investment strategies, which aimed to allocate capital in line with the United Nations Sustainable Development Goals, all commonly known as the SDGs. Beth joined Aberdeen Standard Investments in 2013 after working in research and communication roles across a range of sectors, including legal services and utilities. Beth didn't take a traditional path to finance, she is actually a graduate in literature, she has an MSc from the University of Edinburgh and is currently undertaking a Masters of Law with a focus on human rights and international development. Beth was born and raised in Minnesota, she moved to Edinburgh to do her masters and has stayed on for about 16 years.Sshe met her fiancé in Edinburgh who is in fact from Zimbabwe, so she's been learning a lot about African culture including taking some basic Shona lessons, although she claims to be pretty terrible at it. Now, Beth used to volunteer teaching English as a second language to recent immigrants and refugees in Edinburgh. So Beth a very warm welcome to our podcast.

Beth Meyer: Hi Amanda, thank you for having me.

Amanda Young: So, Beth, can we begin with a little bit of your history if you like. You started out studying literature you've hold a number of communications and research roles outside of finance.Perhaps we can hear a little on how you came into the role you're doing today, largely driving human rights research with within a large asset management house.

Beth Meyer: Yeah so if you told me in my 20s that I’d be working in finance, I probably would have laughed - it really wasn't what I was expecting myself to be. I originally studied literature and philosophy with the intention of going into law and I had worked for a law firm during Uni, however after I graduated, I really wanted to travel and that's why I ended up living in Scotland.

My plan had always been to return to the U.S and given that law and practice varies by jurisdiction, it didn't seem like it made sense to study law in Scotland only to retrain when I went back to the U.S - with hindsight that might not have been the most logical choice given that I’ve ended up staying in Scotland for about 16 years now. But for a long time I was always thinking I’d return to the U.S, you know next year, next year.. next year.. and it took me a long time to sort of decide or to realize that I was actually quite settled here - that this is where I wanted to be. My whole family is back in the U.S so it wasn't an easy decision to leave, let alone to stay for so long. And so anyway, I went down more of a communications route and ultimately ended up writing tender documents and RFPs or ‘Requests For Proposals’. I did this for a few different sectors, ultimately ended up in that role at Aberdeen Standard Investments or what was Standard Life Investments back then. In that role, clients will ask you pretty much any question they can give about your products and services. It was already written in documents, so I didn't necessarily have to know at all off the top of my head - the point of the job was more to know who would know the answers and then ultimately work with them to respond to the question. But when I joined the company, this is when clients really started asking more and more questions about ESG and Responsible Investing, so it went from being kind of one question asked every now and then, to being in pretty much every questionnaire or sometimes having the entire questionnaire dedicated to ESG. And to be honest, before I joined the company, I’d never even heard of ESG - I didn't realize it was a thing - but as soon as I figured out what it was, I knew that's what I wanted to do. So, I started learning as much as I could, volunteering to take on all the ESG questions for the team so that I have more excuses to kind of speak with and interact with the ESG team. I did the IMC in the first CFA exam and now doing a Masters In Law which is really helpful in the human rights area in particular and ultimately in the end I was lucky enough to get a position within your team Amanda, working with an ESG analyst with a focus on human rights.

Amanda Young: Now typically when you think of human rights one thinks of oppressive regimes, bonded labour, right of life and freedom. It'd really be good to understand why human rights is an important issue for investors to consider and perhaps the types of human rights issues that are relevant and emerging for the investment industry.

Beth Meyer: Human rights can span a way a wide range of issues. The Universal Declaration of Human Rights includes everything from freedom from slavery and torture, to the right to work, education and an adequate standard of living. Many people do associate human rights more with governments, and indeed we do invest in government securities at ASIsuch as sovereign bonds. And a government's capacity to protect human rights can impact investments in a number of ways both positively and negatively. So, for example fair employment opportunities and rising standards can enable people to participate more fully in society, which can stimulate productivity and spending that boosts the economy.

Conversely governments that lack a focus on human rights or participate in abuses, they not only miss out on these types of economic opportunities, but they may also discourage foreign investment and create social unrest, they could damage or disrupt the economy.

From an individual company perspective, human rights is an important consideration as well. Many of us have seen growing media reports of modern slavery in supply chains.This is often thought to mainly happen in parts of Asia and Africa but we've also had cases of modern slavery here in the UK as well. Companies linked to these practices can face the regulatory sanction, as well as additional costs or operational disruption, as they attempt to address the situation. And from an investment perspective, this raises questions about the company's ability to properly manage or mitigate risks which then may lead to a drop in valuations or challenges to their credit rating.

In terms of emerging human rights risk areas, attention to modern slavery is definitely growing. We've seen governments in the UK and Australia for example implement corporate disclosure requirements on how companies are working to eradicate modern slavery from their supply chains. We've also seen restrictions imposed in the U.S by customs and border protection to prevent goods and materials from entering the U.S where they believe that they've been made in forced labour.

Speaking more generally we've also seen a wider shift in the regulatory environment across Europe with a much stronger focus on mandatory due diligence. So, discussions have started at the EU level but individual countries are also taking action in the meantime, with the aim of implementing regulations that require companies to undertake environmental and human rights due diligence. Many of the proposals extend to supply chain due diligence as well which means that rising standards in Europe have the potential to stimulate improvements in other countries where European companies may also be sourcing goods and materials.

And the last one I'll mention here is human rights risk for technology companies - this is also an area to watch. I think a lot of rapidly advancing technology is now coming under fire for being used in ways that these companies probably hadn't really intended, ways that ultimately harm people. Social media for example, is such a significant part of modern life and the ways in which these platforms can be used on one hand to incite violence or to spread dangerous misinformation, or on the other hand to restrict or prevent freedom of expression, is becoming harder and harder for society and regulators to ignore. Other types of technology, for example that promote using data or surveillance and predictive policing strategies, they have the potential to make society safer, but they also raise some serious concerns about discrimination and racial profiling as well as privacy.

Amanda Young: I think it's really interesting to see how emerging technologies are actually creating new and emerging human rights issues for us to look at. Now human rights is clearly a very emotive issue and it brings out complexities that could be very difficult to navigate. One tool we have as investors, is to engage with our underlying investments to speak with the management and hold them to account. Perhaps you can touch on how engagement is used as a tool when you are looking at human rights.

Beth Meyer: Absolutely, so engagement can be used for a few different purposes. It can help us to better understand the company's approach to managing human rights issues which then informs our own analysis and investment decision making or we can use it to target companies where we think they might be underperforming, or not taking the right kind of action. And we can then use our influence as investors to encourage better practices or sometimes it's even a bit of both.

Engagement in human rights, I think, is particularly important because much of this kind of analysis is qualitative rather than quantitative. There aren't really a lot of metrics we can use to understand human rights risks. You know, it isn't like climate change where you can think about tons of carbon emissions for example - you're not really going to get companies reporting on, you know, how many human rights they've abused or upheld over the last year, you know, it just isn't that straightforward. There are some figures we can use - for example looking at things like the number of complaints raised through a company's grievance mechanism - but even that doesn't really give you the full picture.You know, a company could have very few complaints but that might actually be because their grievance mechanism isn't actually effective, you know, it isn't trusted or accessible, rather than them actually you know doing a fantastic job. So when we're trying to figure out if a company is taking the right action the UN's Guiding Principles on Business and Human Rights or the ‘UNGPs’ as they're known, are really our touchstone. The UNGPs are the authoritative international standard that elaborates on the state's responsibility to protect human rights, a company’s responsibility to respect human rights, and the duty of both to provide remedy where abuses might occur. So, in a nutshell, what this means is that we expect companies to continually work to understand their actual and potential impacts on human rights, to establish systems that actively ensure respect for human rights and that they take the appropriate action to remedy or address any kind of infringement on human rights. And many companies are not really very good at reporting on these aspects of their business so this is why engagement is such a critical part of our research and investment process and it allows us to better undertake these qualitative assessments and enables us to maintain open dialogue with companies where we can better understand the challenges that they're facing as well and try to encourage best practices wherever possible.

Amanda Young: I think you've really highlighted on how human rights has touched lots of different sectors and it's clearly a very complex issue.

I take a step back at the stage of the podcast and I always ask my guests to try and inspire our listeners maybe sharing a book or a tv film or something that has made you think about sustainability issues - I believe you have both a Netflix documentary as well as a book that you're currently reading? Can you tell us a little bit about both of these?

Beth Meyer: Yeah, so the Netflix documentary, it's called The Social Dilemma. It sets up how influential social media really is in our lives and the ways in which these platforms direct our attention to certain types of content that ultimately shape our views. I think it raises important questions about the ethics behind these types of business models and the impact they can have across society. The documentary includes testimonials from people whose lives have been affected in significant ways by their online activities and the ways in which they've been steered towards certain types of content. It also includes interviews with former employees at technology companies who are now trying to kind of raise the alarm about these kinds of business models and the effects it can have on society and on people.

And the book I’m reading at the moment is called ‘Cast’ by Isabel Wilkerson - well to be honest I haven't actually finished it yet - but enough to be able to say that it is worth reading. The author is examining essentially social hierarchies by drawing comparisons between racial discrimination in the U.S, the caste system in India and Nazi Germany..

Amanda Young: …oh wow

Beth Meyer: ..and the similarities between these systems - you know all of which are based on completely artificial distinctions between people - are striking and actually quite scary. Her main focus is on the U.S and at one point she demonstrates that those setting up the Third Reich in Germany actually turned to the U.S as a model of a racist jurisdiction for guidance on how they could legitimize discrimination and oppression of Jewish people…

Amanda Young: …wow

Beth Meyer: …which I guess it sort of makes sense given the brutality and institutionalization of slavery that happened for so long in the U.S, but it's still just quite startling to read and see it so clearly like in front of me. The Holocaust is often held up as like the ultimate example of human brutality, and rightfully so, like I don't mean to minimize the horror of what happened there in any way, but I think we often forget that slavery was in many ways just as brutal and carried out in the U.S for hundreds of years and we just don't often put the two in the same kind of category like that. We prefer to think of them as two separate things and I think that a lot of white Americans - myself included - we really want to believe that we've put all that behind us and that we're better people than that now but I think the events of 2020, the protests and the Black Lives Matter movements have really showed us that we maybe haven't come as far as we thought we had.

So, I think this book has really inspired me to just think more critically about how racial discrimination becomes embedded into institutions and highlighted how important it is to acknowledge the past and to learn from it, so we can try to find ways to do better in the future.

Amanda Young: Well, that is definitely one I'll be adding to my reading list, thank you so much for that. Now we've got one final question which is where to next - what are the next big human rights issues that we should be looking at as investors?

Beth Meyer: Yeah so I’ve mentioned a few emerging areas already but the one I'll come back to I think is technology. I do think technology is going to be a key focus area for human rights going forward. The tech sector is, you know, it's very technical obviously and innovation is just happening so rapidly that I think regulators and society at large they're really struggling to keep up with it. We're really struggling to understand the impacts or the potential impacts on society. Aand so far tech companies have kind of been trusted to do this themselves and to make sure that their products won't end up causing harm, but I think recent events have really highlighted that they might not be very well equipped to do this. So for investors, I think, this impacts the way that we think about human rights risks for these type of companies and it'll be important to stay on top of any incoming guidance or regulation in this area - so that we can understand the risk to investments, but also so that we can use our influence to encourage best practices and improvements going forward.

Amanda Young: Well Beth, it's been an absolute delight to have you today. I think you've left us with some very thought-provoking areas for all of us to go away and think about very complex issues so thank you for joining us.

Beth Meyer: Yes of course, thank you for having me.

Amanda Young: Now you've been listening to the Aberdeen Standard Investments Responsible Investing podcast, thank you all for tuning in. You'll find all of our episodes on our website.Until our next podcast goodbye for now.