BANKS DODGY DEALS CAMPAIGNS
About BankTrack
20 years of BankTrack – Our history
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
BankTrack in the media
Our privacy policy
Donate
2023-09-18 00:00:00
New report and blog: Barclays' bond with Adani
2023-08-23 00:00:00
Decarbonization: steel not making the cut
2023-07-27 00:00:00
Two months ago 62 organizations and 3 Goldman Environmental Prize winners wrote an Open Letter to the TNFD: No one responded
2023-07-13 00:00:00
The Sustainable Steel Principles: One step forward when leaps are needed
2023-09-15 17:34:10
The number of major banks refusing to support EACOP reaches 24
2023-07-31 14:30:01
Equator Principles recognise projects’ risk to climate for the first time
2023-05-17 14:30:30
EACOP Financial Advisor SMBC is no longer involved with the project
2023-03-28 13:43:00
French bank Société Générale withdraws from Rio Grande LNG
Connect
2023-09-18 00:00:00
Barclays' bond with Adani
2023-06-26 00:00:00
How should financiers align with the Global Biodiversity Framework? Five Key Principles
2023-04-13 00:00:00
Banking on Climate Chaos 2023
2023-04-12 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 4
See all publications
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Banks and Pandemics
Our projects
Tracking the NZBA
End Coal Finance
Banks and Putin's war in Ukraine
Banks and steel
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack 20 years of BankTrack – Our history Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Login
Home › BankTrack news ›
BankTrack News

World’s biggest banks routinely hide links to human rights and environmental abuses behind client confidentiality – study

2019-03-26 | Nijmegen
By: BankTrack
Contact:

Ryan Brightwell, researcher and editor: ryan@banktrack.org 

“We are unable to comment on specific customers...", cover image. Photo: BankTrack
2019-03-26 | Nijmegen
By: BankTrack
Contact:

Ryan Brightwell, researcher and editor: ryan@banktrack.org 

Some of the world’s biggest banks are routinely hiding behind client confidentiality to conceal investments in companies and projects that infringe human and environmental rights, the first study of its kind reveals today.

BankTrack, which campaigns to hold commercial banks accountable, today publishes analysis of five years of correspondence with 31 major international banks regarding problematic projects they finance. It finds that in nearly half of all responses (70 of 150), banks said they could not comment on whether they had a relationship with a particular customer or project. Half of those responses cited client confidentiality as the reason.

The study also finds no legal obstacles to banks disclosing information about their clients in high-risk industries like mining, oil and gas or palm oil, provided they obtain client consent. In almost all major banking centres, client confidentiality is written into bank contracts but is not a statutory requirement. Even where it is, in countries such as Switzerland and Singapore, the report finds disclosure is clearly possible with client consent.

“When big banks hide links to companies that use child labour, trash rainforests or displace indigenous people, they make accountability for those abuses impossible. Banks routinely claim that they are prevented from disclosing their finance for these companies, but we’ve found that this is a choice banks make. It doesn’t have to be this way. Banks can – and do – write the right to disclose into their contracts when it suits their interests. They must do so when it comes to basic human rights,” said Johan Frijns, Director at BankTrack.

In BankTrack’s analysis, HSBC was the bank found most often to cite client confidentiality as an obstacle to disclosing its clients, representing a total of 7 per cent of all responses audited (11 of 150). The research finds that banks based in the UK, Canada and Asia are the least likely to disclose their clients, with those in mainland Europe the most transparent. Transparency varies significantly across banks in both the USA and Australia.

The findings of the report point to the huge importance of transparency commitments being part and parcel of every sustainability commitment. The ongoing revision of the Equator Principles, a risk management framework adopted by financial institutions to assess and manage environmental and social risk, and UN’s Principles for Responsible Banking, which are currently being drafted, both provide opportunity for the banking sector to strengthen such commitments.

“Victims cannot engage with the banks backing companies that have abused them if those banks will not even confirm whether they are involved. More transparency is critical if industry standards to assess and manage environmental and social risk are to function. As revision of the Equator Principles is currently underway, banks have the opportunity to affect a step change in transparency by making public disclosure of all transactions a condition of all their future lending,” said Johan Frijns.

Responding to the report’s findings, Christian Donaldson, IFI Economic Justice Policy Advisor at Oxfam, said: “Development finance is increasingly being delivered via financial intermediaries such as commercial banks. For vulnerable and marginalized communities, the need for transparency and disclosure of such transactions including project-related information is real and urgent. But bank confidentiality practices represent the first major challenge to this approach for development finance.  In Oxfam’s view, it is an impossible situation for the banks to make sustainability and human rights commitments and then fail to provide the necessary and relevant information for these commitments to be assessed or monitored in practice by communities, investors, or CSOs alike.”

Notes to editors:

  1. The briefing paper, "We are unable to comment on specific customers...", Challenging banks on client confidentiality, can be downloaded here.

  2. The analysis in the report is based on a database of 150 pieces of correspondence BankTrack received from 31 large international banks, in response to their enquiries, between 2012 and 2017.

  3. The paper and its recommendations are endorsed by: Accountability Counsel, Australasian Centre for Corporate Responsibility (ACCR), Bank Information Center Europe, CEE Bankwatch Network, Conectas, The Centre for Research on Multinational Corporations (SOMO), Fair Finance Guide International, Facing Finance, Les Amis de la Terre France, Oxfam, PAX, Public Eye, Rainforest Action Network and Share Action.

Sections
Banks Policies Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature Banks and Pandemics
Our projects
Tracking the NZBA End Coal Finance Banks and Putin's war in Ukraine Banks and steel Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack 20 years of BankTrack – Our history Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Contact@banktrack.org
Donate Mailing list Facebook Twitter
©2023 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted