A practical framework to help investors identify where their portfolios are exposed to conflict and violence, prioritize the most severe risks, and engage companies to address them
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Conflict is no longer a distant or isolated risk for investors. There are more than 130 active armed conflicts worldwide in 2026, more than double the number 15 years ago, and conflict-related fatalities have reached their highest levels in three decades.
In these contexts, risks to people quickly become risks to portfolios. Heartland’s research with Schroders and Wespath documented more than $85 billion in losses across eleven cases where companies’ proximity to human rights harms and conflict translated into regulatory, legal, operational, and reputational impacts.
Guidance exists for companies operating in conflict-affected and high-risk areas (CAHRAs), but investors have lacked fit-for-purpose tools to assess and act on these risks. To close that gap, Heartland partnered with TrustWorks Global, a Geneva-based firm with more than twelve years of experience supporting responsible business and investment in CAHRAs. The guidance combines Heartland’s portfolio analysis work with institutional investors and TrustWorks’ experience across more than 200 investor-led engagements and over 70 CAHRAs.
Why this guidance?
Overview of the guidance
Part 1: Portfolio analysis
Heartland’s analyses typically find that 15 to 25 percent of portfolio companies have proximity to harms in CAHRAs. A three-stage proximity methodology helps investors identify the companies with the most severe and systemic risks, then tier and prioritize them for action. The methodology is grounded in Heartland’s Saliency-Materiality Nexus, the point where risks to people become material risks to companies and their shareholders.
Part 2: Active stewardship and company engagement
Five key questions help investors assess a company’s exposure, governance, strategy, risk management, and metrics and targets in CAHRAs. The guidance also identifies five common “red flag” company responses, explains how investors should answer them, and sets out practical recommendations investors can make to portfolio companies.
Case examples from De Pury Pictet Turrettini and LBP AM show the approach in practice.
Foreword by Paul Polman
It gives asset owners and managers what they have long lacked: a way to know where their portfolios touch conflict, violence, and fragility, and a framework for asking portfolio companies the hard questions before a crisis forces the question on them. Investors are not bystanders either. Capital allocated without regard for CAHRA-related risks is capital that, knowingly or not, helps determine whether a fragile context tips toward stability or toward violence. Paul Polman, former CEO of Unilever
Key insights
Conflict is a contextual risk amplifier, not a standalone human rights issue
Whatever the salient or material risk linked to a company’s operations, products, or business relationships, it is likely to be more severe and systemic in a CAHRA.
A CAHRA lens protects more rights holders and shareholders
By prioritizing the most severe and systemic risks in companies’ operations and relationships across CAHRAs, the Nexus helps investors use limited resources more efficiently, fulfill their ethical, legal, and fiduciary duties, and help protect a greater number of people.
Standard human rights due diligence (HRDD) is not enough
In conflict settings, HRDD often misses the most severe risks: complicity in violations of international humanitarian law and adverse impacts on the conflict itself. Conflict-specific due diligence (CSDD) addresses these gaps by integrating heightened HRDD with international law, sanctions compliance, and conflict analysis.
Intended audience
The guidance is designed for human rights, ESG, and investment professionals at public equity asset owners and managers, and it is also relevant for private equity investors. It applies across both active and passive strategies, whether you are screening thousands of holdings or engaging a single company.
Developed with investors, for investors
The guidance was peer-reviewed by more than 25 representatives of leading asset managers, asset owners, and investor associations. It has been endorsed by AP2, Ethos, Investor Alliance for Human Rights, LBP AM, Miller/Howard Investments, Praxis, De Pury Pictet Turrettini, SHARE, Storebrand, Sustainable Finance Geneva, University Pension Plan Ontario, and Wespath.
Put the guidance into practice
Want to understand where your portfolio touches conflict, or how to apply this framework to your stewardship program? Heartland works with institutional investors to assess CAHRA-related risks and strengthen engagement strategies. Our portfolio analyses pinpoint the holdings with the greatest exposure, and our tailored learning services help teams build the policies, practices, and engagement approaches to address it.
Talk to our team
Explore the full guidance in the viewer below. Reach out to our team if you have any questions or inquiries.