The Mutual Fund Industry and the Protection of Human Rights

Abstract

This article considers the appropriate application of the United Nations Guiding Principles on Business and Human Rights (UNGP) to the mutual funds industry. Mutual funds can impact human rights by financially supporting oppressive states or abusive companies. Given the indirect nature of such impacts, along with the exclusively external management of the funds, this article argues that a unique approach to implementing the UNGP is necessary for this industry. Divided into five parts, the article outlines the governance structure of mutual funds and the expectations on states and businesses in the UNGP, before assessing the appropriateness of applying current guidance for banks and other financial actors to mutual funds. The article concludes with practical recommendations for both fund managers and states on the implementation of the UNGP in this industry.