A Letter to the MN SBI: Human Rights Should be Considered in Investment Decisions.  
The Minnesota State Board of Investment (“MN SBI”) engages in Environmental, Social, and Governance (“ESG”) initiatives to address long-term, material risks and opportunities that are expected to lead to positive portfolio outcomes.

Many concerned Minnesotans have addressed the MN SBI at various quarterly board meetings over the years to highlight the importance of why the MN SBI should take into consideration the effect on human rights of the MN SBI’s portfolio companies. Activities by companies that engage in direct or indirect contributions to the violation of human rights present unique risks in the MN SBI’s investment portfolio and should be thoughtfully analyzed.

More importantly to the citizens and taxpayers of the State of Minnesota, these activities which negatively affect human rights in this country and around the world, are ones which we should not be rewarding with state pension funds.

We, the undersigned organizations, urge the MN SBI to define an appropriate scope and engage with the Board’s investment consultants to review the risks associated with the following:

1. Publicly traded investments in companies that engage in serious or systematic human rights violations, such as murder, torture, deprivation of liberty, forced labor, and the worst forms of child labor.
2. Publicly traded investments in companies that engage in serious violations of the rights of individuals in situations of war, conflict, or occupation.

Some examples of the aforementioned activites include, but are certainly not limited to:

1. Companies involved in activities related to high-tech surveillance systems on the US/Mexico border wall (e.g. to create an ability known as “wide-area persistent surveillance”).
2. Companies that provide or use military hardware, weaponry, surveillance systems, software, and munitions in areas recognized by the United Nations as Occupied Territories.
3. Companies that contribute, directly or indirectly, to varying degrees of child labor practices through their business practices or supply chains.

It is concerning that, thus far, there has been no attempt by the MN SBI to examine ESG risks from the perspective of human rights. This analysis has already been undertaken by many financial institutions, organizations, and state investment funds.

We ask that the MN SBI take this opportunity to pave the path forward as a state investment fund which puts human rights as an equal weighted consideration in its authorized investments portfolio. This would serve as a starting point in building a robust, risk-based framework, in alignment with the MN SBI’s fiduciary duty.

Fortunately, a precedent has already been established, and frameworks exist, for analyzing human rights as a factor in investment decisions. For example, leading state investment funds from countries such as Norway, with assets under management of well over one trillion U.S. dollars, have already adopted human rights as a consideration in their authorized investment portfolio. Indeed, there exist companies in the MN SBI’s authorized investments that the Norwegian state pension fund has already excluded†.

If the investment analysis produces stated risk(s) that point to declining market values for such companies involved in human rights abuses, it would be appropriate for the MN SBI Executive Director to remove these companies from their investment portfolio.

We look forward to hearing back from you in regard to the above and staying up to date on the commissioning of this investment report.

With many thanks,

Minnesotans for Human Rights

†Norweigan Government Pension Fund’s List of Excluded Companies

†Norweigan Government Pension Fund’s Expectations to Companies in Regard to Children’s Rights

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