"Swiss watchdog accepts human rights complaint against UBS Bank over private prison investments," 28 August 2024

...The Swiss National Contact Point for Responsible Business Conduct (NCP), a governmental business and human rights watchdog, accepted a complaint by human rights groups against Swiss banking giant UBS for its investment holdings in U.S. private prison contractors CoreCivic and GEO Group. The complaint was filed by non-profits BankTrack, Coalition for Immigrant Freedom, and Worth Rises...

The complaint... alleges that UBS breached OECD guidelines by failing to exert the influence it has over CoreCivic and GEO Group through investment in those security contractors to try to curb the human rights abuses taking place in the contractors’ facilities...

In UBS’ response to the complaint (summarised in the Initial Assessment), the bank argued that there is “no direct link” between its operations and human rights violations, as the bank’s shares are not actively managed but rather are held in index funds...

In accepting the complaint, the Swiss NCP has agreed to offer its mediation offices... If the parties cannot reach an agreement, the Swiss NCP will examine the issues and make a final decision. The Swiss NCP will then issue a public final statement on the case, which could further clarify the human rights responsibilities that the OECD Guidelines places on banks related to passive investments...

"UBS pushes back against human rights complaint over passive funds," 2 September 2024, from Responsible Investor (behind paywall)

The Swiss manager said that "an overly expansive interpretation of the OECD Guidelines" which would consider passive investors to be directly linked to the adverse human rights impacts of their exposures would "result in unmanageable responsibilities of financial institutions".

UBS also said it has "limited leverage" over the conduct of constitutents in its funds, has no say over which companies are selected by index providers, and is legally committed to replicate the tracke indices as closely as possible.

The asset manager added that it had engaged with index providers on human rights, including marked consultation led by the Principles for Responsible Investment (PRI), and had applied "controversial behaviour" exclusions to actively managed products.