Beyond their own responsibility to respect human rights, financial institutions can play a critical role in helping to set expectations for virtually every other industry sector.
PARTNERS: public and private financial institutions, including individual export credit agencies, development finance institutions and private banks
At Shift, we think that public and private financial institutions play a very important role in driving business respect for human rights. Private sector financial institutions, like commercial and investment banks and insurance companies, have their own responsibility to respect human rights according to the UN Guiding Principles. Public sector financial institutions, like national development finance institutions and export credit agencies, also have to respect human rights in their operations.
Beyond their own responsibility to respect human rights, financial institutions can play a critical role in helping to set expectations for virtually every other industry sector. The breadth of commercial banks’ client relationships means they have connections to a huge amount of business activity going on around the world. And for public financial institutions, their practices can either enhance or undermine states’ own duty to protect human rights.
We're working directly with public and private sector financial institutions and policymakers to build understanding of how the UN Guiding Principles can help financial institutions better manage risks to people arising from the projects and clients that they finance.
For over two decades, a growing number of financial institutions have sought to address environmental and social risks connected to their financing through the adoption of risk management approaches. These approaches have generally been based on the International Finance Corporation’s Performance Standards, which have provided a recognized international reference point at least in the area of project finance.
With the global endorsement of the UN Guiding Principles in 2011 however, leading financial institutions began asking whether and how their existing approaches might need to evolve to meet the expectations of human rights due diligence. In other words, they wanted to understand how the Guiding Principles can help them manage risks to people arising from the projects and clients that they finance.
How to tackle the most severe social (and environmental) risks is the focus of various developments, including the ongoing implementation of the October 2016 Dutch Banking Agreement between leading Dutch commercial banks, civil society stakeholders and the government, the 2018 revision of the Equator Principles, and the OECD Financial Sector Advisory Group’s efforts to develop guidance on responsible business conduct in corporate lending.
At Shift, we are closely engaged in many of these developments. We also have unique experience working directly with public and private sector financial institution partners to understand what needs to change in their policies and practices. Examples of our work with financial institutions include the following:
The kinds of questions that we have explored with these and other financial institutions include:
Interested in learning more? Please contact us.