VC firms are “turning a blind eye” to human rights due diligence, according to a research report produced by Amnesty International.
Using the VCJ 50, a list produced by Venture Capital Journal of the largest venture firms by capital raised in the previous five years, the organization “reviewed public information on each VC firm’s human rights due diligence processes” and “sent numerous letters to each firm, requesting additional information.”
Of the 53 firms it reviewed (which included three tech accelerators: Y Combinator, 500 Startups and TechStars), Amnesty found that only one firm – Atomico – had human rights due diligence processes in place that potentially met the standards set by the UN Guiding Principles on Business and Human Rights.
There are multiple ways in which investors can be exposed to human rights issues, the report notes. One example is the use of VC-backed technology, such as spyware, by repressive governments. Another is VC-backed companies relying on workers in the ‘gig economy’ who may face exploitative or abusive employment conditions.
A lack of diversity among VC investment decision-makers is contributing to the issue, Amnesty states: “This lack of diversity means the new technologies that receive investment are less likely to consider their impact on women as well as minority and marginalized communities.”