Human Rights Expectations for the Banking Sector: A New Report from Foley Hoag and UNEP FI
Attorneys in Foley Hoag’s Corporate Social Responsibility (“CSR”) practice and the U.N. Environment Programme Finance Initiative (“UNEP FI”) recently collaborated on a report analyzing the implications of the U.N. Guiding Principles on Business and Human Rights for the banking sector. A copy of the report is available here.
In addition to assessing the implications of the U.N. Guiding Principles, the report evaluates existing national and international human rights laws and the extent to which these existing laws may create potential liabilities for banks and/or their officers. Finally, the report evaluates the implications of existing soft law and voluntary guidelines and the potential for such standards to harden into binding obligations for banks.
As the report notes, “[t]he landscape for banks as well as other companies with regard to human rights is changing.” The U.N. Guiding Principles have established the “expectation that banks, like other companies, will conduct due diligence to identify and address their own [human rights] impacts, as well as those to which they contribute or to which they are directly linked through business relationships.”
The expectation that companies will conduct due diligence to identify their human rights impacts is particularly challenging for banks, which many be linked to a diverse range of potentially adverse impacts through their operations, products, and services. In assessing how to approach due diligence, banks — and all companies — should prioritize those parts of their operations that are likely to have the most severe impacts on human rights, or have impacts that are not remediable.
The Foley Hoag/UNEP FI report is intended as a resource for stakeholders of the banking sector who wish to understand the content and implications of the U.N. Guiding Principles. The report is intended to complement, and not duplicate, the work of other organizations, including the Organization for Economic Cooperation and Development (“OECD”) and the Thun Group of Banks, which have undertaken efforts to identify practical steps that banks can take to identify and mitigate adverse human rights impacts in connection with their products and services.