Commisioned by
Focus on the role of businesses integrating and addressing human rights within their operations has steadily grown since the introduction of the UN’s Guiding Principles on Business and Human Rights in 2011. In recent years, new regulations, such as the EU’s disclosure regulations, are increasingly shaping the global sustainable finance landscape and human rights is steadily claiming attention.
Research objective
The report, a follow on of a study of a 2020 study, documents how the European financial services industry factors human rights considerations into its operations, comparing it where possible to the status two years ago. The research focuses on banks and asset managers based predominantly in six European countries, namely France, Germany, Luxembourg, the Netherlands, Switzerland and the UK.
Key findings in brief: comparing data from 2022 with that of 2020
- The finance industry remains highly aware of the relevance of human rights for its activities. The link between human rights and financial institutions’ fiduciary duty remains strong.
- Regulation is now the main driver for addressing human rights.
- The finance industry continues to fully acknowledge that it has an important role to play in addressing human rights, while still pointing to the government’s duty to ensure the respect of human rights through regulation.
- Top management continues to support the need to address human rights, but organizational obstacles and gaps remain for integrating human rights in daily business operations.
- The major obstacle for integrating human rights in core business operations is still the lacking availability of better and more reliable data from companies. Greater standardization of reporting and disclosure is also needed. Furthermore, financial institutions express the need for a clearer understanding on how to implement regulatory requirements, and for more education of employees.
Recommendations in brief
- Financial institutions should build organizational capacity for advancing human rights in corporate practice. Most importantly, they need to continue their efforts to allocate adequate resources, invest in building expertise on human rights, and assign clear responsibilities for human rights throughout all levels of the organization.
- Financial institutions should use their legal duty to report on human rights as part of their broader ESG-related reporting obligations as a strategic tool to drive further implementation of human rights due diligence.
- Trade bodies should continue taking a more proactive role to ensure that human rights aspects are adequately present in the public debate, political considerations, and their members’ business operations.
- Lawmakers should create consistent regulatory standards at the European level. Regulations regarding requirements, processes, and reporting should be aligned, consistent, and not contradictory for financial institutions and companies.
- Whenever possible, companies should strive to provide meaningful and accessible data on their risk exposure and management capacity relating to human rights.
- Clients should continue asking for sustainable financial products that integrate human rights considerations.
