The Business & Human Rights Resource Centre (BHRRC) released Centering Risks to Migrant Workers in Investment Portfolios (April 2025). The report offers guidance for investors to understand and engage with portfolio companies on the risks to migrant workers across value chains.
Human Level’s Take:
- The BHRRC reports that migrant workers make up about 5% of the global workforce and are especially vulnerable to human rights abuses due to factors like subcontracting, unstable jobs, unethical recruitment, lack of union rights, limited social protection, discrimination, and language barriers. The most common industries where these abuses occur are agri-food (32% of cases), construction and engineering (20%), and manufacturing (12%).
- The briefing highlights that human rights risks to migrant workers also pose significant business risks, especially for long-term, diversified investors. These risks include financial costs (like fines and remediation), operational disruptions (like strikes or lost buyers), legal consequences (like lawsuits and penalties), and reputational damage (like consumer backlash over labor abuses).
- Investors (and companies looking at their own value chains) should look to the sectors and where the risks to migrant workers are likely to occur. The saliency of risks to migrant workers can be determined based on the scale (or gravity) of the harm, the scope of people impacted and the remediability of the impacts.
- What can investors and companies do? Key recommendations include creating accessible, transparent grievance mechanisms in workers’ languages and that are available to contractors and sub-contractors; supporting unionisation through strong commitments to freedom of association; and setting clear expectations for investee companies to investigate and address harms.
- In addition, when investigating allegations the burden of proof should be placed on companies, prioritising worker testimony over audits. Companies should also ensure transparency, and commit to remedies like fee reimbursement and fair compensation, in consultation with workers and their representatives. Investors are also encouraged to adopt fair recruitment policies, such as the Employer Pays Principle, and use their influence to drive change in portfolio companies.
Some key takeaways:
- The scale of the problem: Migrant workers are an estimated 5% of the global workforce and face heightened human rights risks and exploitation, driven by sub-contracting, precarious work, unethical recruitment, a lack of legal rights to unionise, a lack of access to social protection, discrimination, language barriers and more. The Business & Human Rights Resource Centre’s (BHRRC) Migrant Worker Allegations Database documented 665 cases of alleged migrant worker abuse worldwide in 2024. This involves at least 489 companies across various levels of global supply chains—from multinational buyers to local employers and recruitment agencies. However, in 301 cases (45%), the companies involved were not identified due to under-reporting, lack of supply chain transparency, and workers’ fear of retaliation, all of which hinders accountability. (For more, read our summary of key takeaways from the database). The top three value chains where migrant workers face abuses are in agri-food supply chains (32% of cases), construction and engineering (20% of cases), and manufacturing (12% of cases).
- Risks to workers are risks to portfolios: The BHRRC underscores that human rights risks to migrant workers translate into risks to business, especially for investors with highly diversified and long-term portfolios. These risks can be financial, like fines, sanctions and costs of remediation; they can be operational, for example if workers strike or buyers quickly disengage from suppliers; they can be legal, such as lawsuits and penalties from labour authorities; and they can be reputational, when consumers react to allegations of forced labour and other human rights impacts. The briefing shares a number of case examples of companies experiencing litigation, regulatory fines and penalties, reputational impacts driving devaluation, supply chain delays and disruption, and more impacts to the bottom line. How should investors assess the saliency of risks in their portfolios? They can look at the scope of the risk, where migrant workers are more concentrated in supply chains and where sectors and markets are reliant on migrant labour. They can also look at scale, i.e., the gravity of the human rights issues identified. And they can look at the ability to remediate the issue and put things right for workers.
- How to take action: The briefing provides key actions for investors, which can also serve as learnings for companies. The briefing encourages engaging with industries with high numbers of migrant workers to improve their rights and mitigate risk, for example by implementing accessible, transparent operational grievance mechanisms accessible to all workers and in their languages; and ensuring an enabling environment for migrant workers to join and form trade unions by strongly committing to the principles of freedom of association and collective bargaining. It also recommends setting requirements for investee companies to: fully disclose measures to investigate, address and remediate harms; investigate concerns raised by workers related to working conditions, including from workers themselves, civil society, unions or media; privilege worker testimony over audits and “paper trails” and centre workers in the investigations; balance the risks of increased transparency with effective action and remedy; and commit to remediate harms in consultation with workers and their representatives, such as reimbursement for fees and interest on loans, compensation for harm and ensuring access to decent work including for migrants that return home. The briefing also recommends that investors themselves implement policies to mitigate risks to migrant workers, commit to fair recruitment standards like the Employer Pays Principle; and use their leverage as controllers of capital to bring about change in companies.
