Growing interest in sustainability topics and the concept of "stakeholder capitalism" is fuelling attention to human rights issues from regulators and market participants around the world. These trends will increasingly impact the asset management industry in a variety of ways, including through the development of mandatory human rights due diligence (mHRDD) legal regimes.

Regulators are already encouraging or requiring human rights due diligence in various forms. Asset managers, particularly those with global footprints, and their compliance teams must be aware of existing legislation in this area and continue to monitor regulatory developments. This article explores the evolution of human rights due diligence and provides guidance on what asset managers can expect and how they can prepare and respond to future obligations regarding human rights and mHRDD.

Throughout this article, we highlight certain practical steps that asset managers and their portfolio companies can take now to better mitigate non-financial human rights risks, including:

• Integrating human rights into group policies and strategic planning processes;
• Disclosing how human rights considerations are integrated into strategies, policies and procedures;
• Incorporating human rights into risk management policies and procedures; and
• Engaging with relevant stakeholders regarding human rights. [...]