Business Strategy as Human Rights Risk: the Case of Private Equity

David Birchall, Nadia Bernaz

Research output: Journal PublicationArticlepeer-review


In this article, we apply the UN Guiding Principles on Business and Human Rights to the private equity (PE) business model. PE firms often adopt a controversial, ‘value extractive’, business model based on high debt and extreme cost-cutting to generate investor returns. PE firms own large numbers of companies, including in many rights-related sectors. The model is linked to increased human rights risks to workers, housing tenants, and in privatized health and social care. We map these risks and analyse the human rights responsibilities of PE firms. Our analysis has major implications for understandings of human rights responsibility. We argue that value extractive methods are the root cause of eventual harm to human rights, even though they may not harm rights directly. To respect human rights, PE firms must mitigate the risks of these value extractive methods. We define how human rights due diligence (HRDD) could achieve this and argue that given the extent of harm and the lack of a business case for adopting such a view of human rights responsibility, business strategy level HRDD should be a core component of forthcoming HRDD laws.

Original languageEnglish
Pages (from-to)1-23
Number of pages23
JournalHuman Rights Review
Issue number1
Publication statusPublished - Mar 2023
Externally publishedYes


  • Business and human rights
  • Human rights
  • Law and political economy
  • Private equity
  • UN Guiding Principles on Business and Human Rights

ASJC Scopus subject areas

  • Sociology and Political Science
  • Law


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