When Things Go Wrong: The Role of Private Capital in Enabling Effective Remedy

Published: September 21, 2026

The transition to a low-carbon economy is reshaping industries and mobilizing private capital at scale. But investments in new technologies, infrastructure, and business models can also create unintended impacts on people—from workers affected by changing supply chains, to communities living alongside new infrastructure, to consumers affected by emerging technologies.

Preventing these impacts should be the priority. But when harm does occur, investors also need to consider their role in putting things right.

For private capital investors, enabling access to remedy is both a human rights responsibility and an important part of managing risk and protecting long-term value. Unaddressed grievances can escalate into operational disruption, project delays, litigation, and reputational damage.

And many risks may remain hidden until problems emerge. Recent MSCI research covering major publicly listed companies globally found that fewer than 3% disclosed exposure to forced or child labor risk, while 8% faced related allegations and nearly 40% had potential value chain exposure based on their products and business activities. Among companies identified as exposed to these risks, fewer than one-third had comprehensive grievance and remediation mechanisms for supply chain workers. This points to a significant gap: investors cannot rely on corporate disclosure or wait for controversies to surface—they need ways to identify concerns early and ensure that affected people can safely raise them and seek remedy.

There is also evidence that investing in prevention can cost far less than managing impacts once they escalate. A study of 137 development finance institution investments in Africa and Asia estimated that social risks could generate losses of US$25–40 million per project—equivalent to 24–37% of average project NPV—while measures to manage those risks, including stakeholder engagement and grievance mechanisms, represented around 10% of project NPV (and 2% of project expenditure).

Effective grievance mechanisms can help identify and address these impacts early, while remedy provides a pathway to put things right when harm occurs.

For General Partners (GPs), this means thinking about remedy in two dimensions: ensuring portfolio companies have effective mechanisms through which workers, communities, and other affected stakeholders can safely raise concerns; and understanding when and how the investor itself may need to use its leverage—or contribute to remedy—depending on its connection to an impact.

Investors are beginning to engage companies on these issues. In 2025, PRI found that access to remedy and grievance mechanisms accounted for 14.7% of engagement objectives in its Advance initiative’s metals and mining engagements. Yet the equivalent figure for renewable energy was just 3.9%. This gap matters: as capital rapidly flows into new transition sectors, investors have an opportunity to embed effective grievance and remedy systems early rather than waiting for harmful impacts to become entrenched.

BSR’s new PCAP guidance, How Can Private Capital Enable Effective Remedy in the Transition?, sets out practical steps investors can take across the investment lifecycle. These include assessing grievance and remedy systems during due diligence, setting expectations through governance and engagement, supporting portfolio companies to build effective mechanisms, monitoring whether they work in practice, and using investor leverage when impacts arise.

GPs—and the Limited Partners that invest through them—can play an important role in making access to remedy part of how responsible investment is implemented in practice.

Effective remedy should not begin when a crisis lands on an investor’s desk. Building the right systems early can help surface concerns before they escalate, address harm when it occurs, and ultimately support a transition that delivers lasting value for both people and investors.

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