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20 Nov 14 13:11

In a New York Times article from September 13, 1970, Milton Friedman wrote: "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

Friedman's message has always intrigued me and I'd say in principle there should be clear distinctions between the duties and responsibilities of states, governments, companies and individuals. In an ideal world, states would set the rules of the game, citizens would influence the rule setting politically and companies would have a clear playing field in which to do their business.

In reality things are far less clear cut. In today's globalised world, governments, businesses and employees compete against each other. Governments may seek to maximize their short-term voters' franchise; voters may focus on local issues and job security (and neglect economic externalities such as climate change and biodiversity loss); and companies may seek to take advantage of differing country regulations (eg labour arbitrage). In this situation it is not clear to me who is actually setting the "rules of the game", let alone any common rules on a global basis.

There is may be one exception to this: Human rights. Human rights are recognized by international law and more recently have also been translated into responsibilities for corporates (in 2011, UN Special Representative Professor John Ruggie published the Guiding Principles which were unanimously adopted by the UN Human Rights Council in June 2011).

As part of the CRO Forum sustainability working group, we tried to build an understanding of why the insurance industry has to bring respect for human rights into its risk management framework and how it can address human rights issues in its business relationships with other corporations. The paper "Human rights and corporate insurance" is intended to be a basis for discussion between insurance companies and their stakeholders. It aims to help the insurance industry address evolving expectations around its role in respecting human rights and promoting best practice.

This gives me hope that one day Milton Friedman's clear view of an efficient and fair economic system may become reality.

Category: Other

Location: Zurich, Switzerland


Rashunda Tramble - 20 Nov 2014, 4:58 p.m.

I think human rights and business can go hand-in-hand, but businesses need to be educated, something that perhaps risk management expects and insurers can help with.

Take fashion houses that use Bangladeshi factories to make their clothing. The human rights abuses in these factories are known (The Rana Plaza tragedy is just one example One problem is distance: factories physically far away from contracting businesses are perhaps metaphorically far away from regulations also. Perhaps insurance companies and risk managers can work with associations such as the Alliance for Bangladesh Worker Safety to ensure human rights and safety measures are met, maybe as these factories are being built? (

As the CRO Forum report states: "Today, respecting human rights has become a global standard1 that businesses are expected to uphold wherever they operate, regardless of their size, nature or industry sector." There are many ways the insurance industry can make this happen. My example above is just one. Thanks Andreas for this really important report.

Alicia Montoya - 21 Nov 2014, 4:55 p.m.

Clearly, human rights should always always always come above everything else, including business. Last week, a friend who works for the Red Cross explained that even the most ruthless leaders leading the bloodiest of wars try to respect international humanitarian law (IHL). Surely businesses can and should respect IHL too.

And if not for humanitarian reasons, then businesses should do so for their long-term growth. If we approach the issue cynically, one could say that the slaves of today could be tomorrow's consumers (and you don't need to go to 3rd world countries to find human rights abuses: slavery is rife today, even in the EU!

In a world that's helll-bent on ever-increasing profits and growth, surely building the markets and consumers of the future should be on every business strategy?

And I agree with you both, all companies -including insurers-, but also consumers, have a big part to play. We may not single-handedly be able to change the world, but we do have control over where we put our dollars and which businesses we buy from / work with. In my view, no product or service is worth human suffering. Period. So we need to do a better job at identifying which companies are committing these abuses and then ensuring corporate and consumer dollars and deals go to the ones that are building a sustainable future for us all, not just short-term profits for a handful of shareholders.

Paul Meeusen - 30 Nov 2014, 9:18 a.m.

As a global reinsurer we do not have to look far to see where we can practice these good intentions. Countries such India and Mexico, where Swiss Re is present and expanding, have major human rights challenges. There are many ways by which we can act, as an employer, employee, underwriter and corporate citizen, to demonstrate that we only put our capital there where basic human rights are respected. It will indeed challenge us understanding the correlations that Andreas describes. Can the poor farmer looking for crop insurance or the pension fund wanting to reinsure be penalised for lack of human rights in their country? Nonetheless, navigating ambiguity is one of our leadership imperatives, so let us try.

Andreas Spiegel - 1 Dec 2014, 7:23 a.m.

Business and citizens are foremost penalized by a lack of adherence to human rights in the first place. If we see an exposure to human rights violations, we must at least investigate and exert our influence to change things to the better.

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