The recent launch of a human rights-screened ETF has sparked a debate within sustainable investing: should human rights abuses be treated as a distinct investment consideration rather than being subsumed within broader ESG frameworks?
The Jury Global High Dividend Ucits ETF by The Justice Company, an independent initiative focused on applying rules-based human rights and international law standards to public market investing, reached $50.94 million in assets under management as of mid-June. Launched on the HANetf platform, the fund is classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation and listed on London Stock Exchange, Xetra and Borsa Italiana.
This approach of the provider stems from what it sees as a gap in existing responsible investment methodologies. While many ESG strategies rely on ratings systems or sector-based exclusions, Mike Head, senior adviser at The Justice Company, says that neither addresses corporate involvement in serious human rights and humanitarian law violations.
“Most ESG frameworks give a company a score or a rating, and a lot of ethical funds simply exclude whole sectors like tobacco or gambling,” says Mike Head. “Both have their uses, but neither picks up the thing we were worried about: serious human rights and humanitarian law abuses.”
According to Head, these risks are often linked less to a company’s sector and more to where it operates and the relationships it maintains across its value chain. As a result, a company can perform well on traditional ESG metrics while still facing allegations of involvement in human rights violations.
Rather than relying on third-party ratings, the firm’s methodology is based on international legal frameworks, including the Geneva Conventions and the UN Guiding Principles on Business and Human Rights. The screen assesses specific forms of conduct and a company’s connection to them before determining eligibility.
One aspect of the framework is its treatment of human rights violations as a threshold issue. While inclusion decisions are binary, Head shares that the underlying analysis is not.
“We look at how serious the harm is, how many people it affects and whether it can be undone, and we weigh how strong the evidence is,” he says. The assessment focuses on current conduct rather than historical actions that have subsequently been addressed. “A company that is improving is not punished for its past.”
Last year, numerous EU and national supply-chain and human rights regulations were weakened or targeted for repeal, reducing reporting obligations and lowering corporate accountability, according to asset manager Carmignac’s sustainable investment outlook for this year. With cost pressures intensifying, suppliers may face declining labour and safety standards this year, especially in high risk sectors.
A looser regulatory environment raises the chance of exposé-style NGO investigations gaining media attention, increasing reputational risks for companies. “It will be essential to scrutinise supply chain disclosures more closely and proactively engage with firms to detect any decline in standards,” shares Carmignac.
The challenge becomes complex when responsibility is traced through global supply chains and business relationships. Head shares that the firm follows the framework established by the UN Guiding Principles, examining whether a company caused harm, contributed to it, or is linked to it through products, services, financing arrangements or subsidiaries.
A connection alone is not sufficient for exclusion. Instead, the analysis examines whether the relationship is material, ongoing, and the company’s involvement in helping sustain the alleged harm. “A one-off or distant connection usually doesn’t meet the bar,” says Head. “A steady relationship that helps keep the harm going can, even when it’s indirect.”
“We are seeing the early stages of an increase in climate and social litigation, driven by tensions between overlapping legal regimes – from human rights claims linked to climate impacts to challenges around diversity initiatives and regulatory decision-making,” says Ruth Knox, chair of the ESG and sustainable finance practice at law firm Paul Hastings. Supply chains remain a relatively stable area, with regulatory momentum and investor interest holding in diligence-related services, underpinned by both human rights and trade and geopolitical considerations, adds Knox.
The focus on supply-chain relationships comes as concerns over human rights risks in transition mineral extraction continue to grow. According to the research from the Business & Human Rights Resource Centre, allegations of abuse linked to transition mineral mining operations rose 73% year-on-year in 2025, while nearly 70% of mines associated with at least one allegation were owned by or linked to listed companies. Community opposition led to 27 mine suspensions, slowdowns or closures during the year.
The ETF’s methodology also seeks to address a common criticism of ESG investing: inconsistency in data sources and decision-making. Given the fragmented nature of corporate disclosures, the framework draws on court rulings, UN investigations, NGO research and other independent sources.
By the people, for the people: Why investors should care about human rights
Evidence is ranked according to reliability, with formal legal findings carrying the greatest weight. Where allegations remain unverified, they are not considered sufficient on their own to justify exclusion. Head’s firm also documents the evidence, reasoning and sources behind each decision and seeks company responses before finalising serious findings.
“The aim isn’t to claim there’s only one possible answer,” he says. “It’s that every decision can be traced back to the evidence and reasoning behind it.” Some cases inevitably involve judgement calls, adds Head, particularly where evidence is incomplete or contested.
“No serious human rights screen can remove judgement entirely,” he says. Instead, the firm has attempted to formalise the process through governance structures, requiring grey-area cases to be reviewed by a working group rather than an individual decision-maker. “The point isn’t to engineer judgement out. It’s to make sure it’s structured, recorded and open to challenge.”
Whether institutional investors ultimately embrace such an approach remains unclear. According to Head, it is still early to draw firm conclusions on demand from asset owners and fund selectors.
However, he adds that interest has been encouraging. Less than four weeks after launch, the strategy had gathered approximately $40mn.
Certain forms of harm are too severe to be treated as just another factor within a broader ESG scorecard. Whether institutional investors agree could determine how far such approaches move from niche products into mainstream portfolio construction.
