Finance and Banking
The finance and banking sector is central to the flow of capital in our global economy and hence plays a vital role in having substantial leverage over global market players and business decision-making. Financial institutions are key stakeholders in ensuring corporate respect for human rights.
Finance and banking institutions can cause, contribute to, or be directly linked to adverse human rights impacts. Thus, the UN Guiding Principles on Business and Human Rights apply to the financial sector without exception. Examples of adverse impacts directly linked to the sector include; a pension fund investing in private prisons that employ forced prison labor, investing in food and beverage companies that systematically buy produce from farms using child labor, or investing in companies that source conflict minerals. Financial institutions may also contribute to human rights abuses by lending money to agricultural companies involved in land grabs or by funding infrastructure projects that displace Indigenous populations.
The UN Guiding Principles on Business and Human Rights and the OECD Guidance on Responsible Business Conduct for Institutional Investors call on businesses and financial institutions alike to ensure that, at a minimum, their activities respect the rights contained in the International Bill of Rights and the ILO Core Conventions. Where financial institutions, public or private, may impact people, they should uphold their human rights responsibilities by conducting human rights due diligence and remediating harms. This responsibility extends to international development financing organizations and investment funds operated by national governments.
The Investor Alliance leads and coordinates a number of efforts regarding the human rights performance of the financial sector. These activities and key resources include:
The Investor Alliance-led statement, Making Finance Work for People and Planet, signed by a group of institutional investors representing US$1.9 trillion in assets under management and calling for enhanced investor due diligence to address environmental, social, and governance (ESG) risks, including human rights risks, throughout the investment lifecycle.
The Investor Alliance-led submission to the latest Equator Principles review process, signed by a group of institutional investors representing US$1.2 trillion in assets under management and outlining key recommendations for alignment across EP4 and authoritative business and human rights standards.
Webinar hosted by the Investor Alliance and the Investors & Indigenous Peoples Working Group on the human rights aspects of the Equator Principles, with expert speakers Anita Ramasastry and Carla Fredericks and investor insights from Steven Heim and Delaney Grieg.
Investor statement of support for the BankTrack Human Rights Benchmark, covering 50 of the world's largest private sector banks based on the expectations of the UN Guiding Principles on Business and Human Rights, and webinar on the Benchmark with a presentation by BankTrack's Ryan Brightwell.
Investor statement in support of BankTrack's 2022 Human Rights Benchmark, which the Investor Alliance collaborated with BankTrack to release. Learn more about the Benchmark and its results by viewing this webinar.
To learn more about our work on finance and banking, please contact Anita Dorett.