Companies investing in emerging markets are increasingly at risk of being or appearing complicit in human rights abuses, as the global picture on rights violation worsens, a new report by the forecasting company Maplecroft said.
Crackdowns by governments in the Middle East following the Arab Spring have caused an increase in the number of human rights violations globally, while "land grabs" in Africa have also driven a worsening in the environment.
"Human rights violations are increasing, they are endemic in many countries and they don't get attention," Alyson Warhurst, Maplecroft CEO said.
The situation in many developing countries for children forced into labour, women and migrant workers - who are often very vulnerable to being laid off and abandoned during economic downturns - is increasingly bleak, Warhurst said.
"70% of the world's supply chain are in growth economies and resource-rich less-developed countries, so therefore it's highly relevant for businesses who are at risk of complicity and also basically risk to continuity of business and cost of capital… I can assure you that investors are costing this in."
The dramatic upheaval in North Africa has highlighted the link between social justice, political risk and economic risk, with investors and businesses increasingly having to come to terms with the reality that human rights violations, social imbalances, political repression and disenfranchised youth represent real risks to the stability of economies and supply chains.
"Disenchanted youth is a really important thing… What comes out of the [Middle East and North African] countries is that they are unlike any others. Most countries have a balanced relationship, poor or good, between political freedom and social gains and protection of human rights. But in the Arab Spring countries, they have very poor political freedom, but social gains have been moderate and out of balance," Warhurst said.
Egypt and Tunisia had relatively high levels of tertiary education and young populations, but corruption limited job opportunities and political participation was marginal.
"You've got youth who have been through college and expect a job at the end. It's that education that has given them the confidence to get out on the street and know there's another world out there," Warhurst said.
The risk that similar dynamics could emerge in Europe is not insignificant, according to Warhurst, although the scale of the political disenfranchisement and abuse of power, even in the austerity-hit Greece, is marginal compared to that in the Middle East.
Riots have hit cities across the continent in the face of worsening socio-economic conditions, but deriving the root cause of violence is difficult, according to Warhurst.
"One of the things that's really worrying me and I don't know how to factor in is criminality. Violence and protest happens for all sorts of reasons. You've got ethnicity, political, you've got religious, criminal, youth disenchantment. It's incredibly difficult to distinguish the difference between criminal and political."
One potential mitigating factor, Warhurst said, is that the societal imbalances in Europe and the UK are skewed in a different direction - the concern is more that countries will struggle to pay for ageing populations who themselves are less likely to take to the streets.
"There's a difference between young and old people. You're not going to see old people protesting, you're just going to see them depressed and very disillusioned. Young people are the ones that have got the confidence, you can see it worldwide."