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Banks and human rights
The Universal Declaration of Human Rights clearly states that "every organ of society", including business enterprises and therefore banks, has human rights obligations. Human rights are typically grouped into (1) civil and political rights, and (2) economic, social and cultural rights. Banks have the potential to impact upon all these rights, both positively and negatively, and in a number of ways.
Banks can cause human rights violations themselves, such as through discrimination in hiring or service provision. They can also contribute or be linked to human rights violations through lending or other financial support for companies responsible for violating human rights. For example, banks have provided finance for agricultural companies involved in land grabs; given loans for large dams which displace Indigenous Peoples; provided lending to mining companies which have benefitted from paramilitary violence around their operations; and supported companies with forced or child labour in their supply chains.
The United Nations Guiding Principles on Business and Human Rights, (UNGPs) unanimously endorsed by the Human Rights Council in June 2011, provide clarity on the expectations of the international community regarding the human rights responsibilities of corporations. With the Guiding Principles, the UN Human Rights Council defined the corporate responsibility to respect human rights, which is entirely and unambiguously binding for the financial sector.
BankTrack's human rights campaign
BankTrack's human rights campaign pushes for banks to fully meet their responsibilities to respect human rights and human dignity across their operations. Since the implementation of the UN Guiding Principles in 2011, we have focused on the following four areas:
- Benchmarking banks on their implementation of the UN Guiding Principles,
- Researching issues relevant to banks and human rights,
- Engaging with banking sector and multilateral initiatives, and
- Challenging bank finance for human rights abuses.
1. Benchmarking banks on the UN Guiding Principles
BankTrack's Human Rights Benchmarking report benchmarks large international banks on their progress towards fully implementing the UN Guiding Principles. The third and most recent version of the Human Rights Benchmark was released in November 2019, and assessed and scored the human rights policies, processes and reporting of 50 banks against criteria based on the UNGPs. It found that, of the 50 banks ranked, 40 were considered ‘laggards’ or ‘followers’, meeting less than half of the UNGPs criteria. Nearly a decade on from the introduction of the UNGPs and banks are still not meeting international requirements on human rights.
- Download the latest BankTrack Human Rights Benchmark (published November 2019) or view the news release and table of scores.
- Download the second benchmark (published June 2016) or read the news release.
- Download the first benchmark (published December 2014) or read the news release.
2. Researching issues relevant to banks and human rights
Access to remedy
In response to the debate on when banks should contribute to remedy we produced a briefing paper in December 2017, "How banks contribute to human rights violations", presenting eight case examples. This highlighted how banks can, in many different ways, contribute to human rights violations and therefore have a responsibility to contribute to remedy.
In 2018 we published "Developing Effective Grievance Mechanisms in the Banking Sector" with Oxfam Australia, to encourage banks to meet their responsibilities to ensure access to remedy. This was presented to banks via two webinars (see recording here).
In March 2019 we published “We are unable to comment on specific customers…” to encourage banks to include disclosure considerations in their overarching environmental and social risk frameworks. Banks have routinely responded to enquiries we have made about specific transactions, especially regarding adverse impacts, by stating that they are “unable to comment on specific clients”, often citing “client confidentiality” as the reason. When banks say they cannot comment on specific customers, we know this is not the whole story, because there are enough examples provided by banks themselves that show that they can and often do.
3. Engaging with banking sector and multilateral initiatives.
BankTrack continually engages with banks individually and collectively on human rights matters. This includes engagement with the Thun Group, the DBSA, the OECD, the Equator Principles Association, and a presence at the UN Forum on Business and Human Rights. As part of this work, BankTrack has also produced a number of reports on specific issues, such a grievance mechanisms and client confidentiality.
BankTrack has engaged with the informal ‘Thun Group’ of banks, which was formed to discuss the implications of the UN Guiding Principles for the banking sector. We welcomed the Thun Group's first Discussion Paper in October 2013 and provided a response highlighting some key concerns. We also responded to the Thun Group's second Discussion Paper in January 2017, coordinating an open letter calling for it to be withdrawn, and produced a Fact Sheet summarising UN advice which the paper had failed to take into account. After the Thun Group updated its paper in December 2017, clarifying but not substantially changing its position, BankTrack responded with an open letter urging the Thun Group to follow a robust process of stakeholder consultation for any subsequent papers, in line with the advice of the UN Working Group. Unfortunately its response did not indicate a willingness to do so.
Dutch Banking Sector Agreement
The Dutch Banking Sector Agreement (DBSA) was signed in October 2016 and commits 11 Dutch banks to work together with other signatories from civil society, trade unions and government towards meeting their responsibility to respect human rights, as set out in the OECD Guidelines and the UN Guiding Principles. BankTrack has been following the Agreement as a non-signatory since its inception.
BankTrack has published a number of articles reviewing the DBSA and its outputs to date:
- Going Dutch: What’s in the new Dutch banking sector agreement on human rights?, (November 2016)
- Not rushing these things: The first Annual Report of the Dutch Banking Sector Agreement on Human Rights, (August 2018)
- How to move the world: the Dutch Banking Sector Agreement's Increasing Leverage paper, phase one, (October 2018)
- Banks must show their teeth to tackle cocoa abuses - BankTrack’s view of the Dutch Banking Sector Agreement’s Cocoa Paper, (December 2018)
BankTrack is a member of the Advisory Group to the OECD Project for Responsible Business Conduct in the Financial Sector, through which we aim to encourage higher standards in the implementation of the OECD Guidelines for Multinational Companies, particularly in the field of human rights. For more information, see our ‘Banks and the OECD Guidelines’ campaign page.
UN Forum on Business and Human Rights
BankTrack has been a regular presence at the UN Forum on Business and Human Rights since 2012. In 2013 we presented our response to the Thun Group. In 2014 we convened a panel on human rights and the finance sector. In 2015 we participated in a panel on "providing access to effective remedy in the financial sector". In 2016 we co-organised a panel on "Banks & the UNGPs: implementation case studies and dilemmas". In 2017, although we did not participate in a panel discussion, we contributed an article to the UN Forum Blog, titled "steps forward and steps back on the road to access to remedy in the banking sector".
Since the adoption of the Equator Principles (EPs) in 2003, BankTrack has continually engaged with the Equator Principles Association and individual Equator Principles Financial Institutions, and facilitated civil society engagement with the EPs, including on human rights matters. For more information, see our ‘Tracking the Equator Principles’ campaign page.
4. Challenging bank finance for human rights abuse
In 2016 BankTrack began a series of Human Rights Impact Briefings examining bank links to specific human rights impacts. For each briefing, the banks involved are asked to describe the actions they have taken to address these impacts, in line with their responsibilities under the UN Guiding Principles.
- The first briefing investigated labour standards violations in IOI Corporation's Malaysian plantations
- The second briefing investigated Drummond and paramilitary violence in Colombia
- The third briefing investigated Trafigura, Vitol and the supply of high sulphur "Dirty Diesel" to Africa
Responses received from banks have varied, but the majority did not provide a substantive response. Rather, they provided general descriptions of their human rights policies and due diligence processes, which shed little or no light on the actions taken by the bank. If bank policies work, we would expect to see better responses from banks which score well on their human rights policies, however this work indicates that this is not necessarily the case.
BankTrack also challenges bank finance for human rights abuses via its Dodgy Deal work, and Dodgy Deal profiles on the BankTrack website provide details of the human rights impacts of each project or company.
Further information: the human rights responsibilities of private sector banks
The UN Office of the High Commissioner for Human Rights (OHCHR) and the UN Working Group on Business and Human Rights are the two UN bodies with a mandate to interpret the UNGPs. They have provided advice clarifying the responsibilities of the finance sector under the UNGPs. In particular, the OHCHR provided a detailed guidance note in June 2017 in a response to BankTrack.
Further advice regarding the banking sector's responsibility was published in response to a paper by the Thun Group in January 2017, and is collected on the website of the Business and Human Rights Resource Centre.
Agricultural Bank of China China
Banco Bradesco Brazil
Banco do Brasil Brazil
Banco Santander Spain
Bank of America United States
Bank of China China
Bank of Montreal (BMO) Canada
Barclays United Kingdom
BNP Paribas France
Caixa Econômica Federal Brazil
China Construction Bank China
Citi United States
Commonwealth Bank Australia
Crédit Agricole France
Crédit Mutuel France
Credit Suisse Switzerland
Deutsche Bank Germany
Goldman Sachs United States
HSBC United Kingdom
Industrial and Commercial Bank of China (ICBC) China
Intesa Sanpaolo Italy
JPMorgan Chase United States
Lloyds Banking Group United Kingdom
Mitsubishi UFJ Financial Group (MUFG) Japan
Mizuho Financial Group Japan
Morgan Stanley United States
National Australia Bank (NAB) Australia
NatWest Group (formerly RBS) United Kingdom
Royal Bank of Canada (RBC) Canada
Société Générale France
Standard Chartered United Kingdom
Sumitomo Mitsui Banking Corporation (SMBC) Japan
Sumitomo Mitsui Trust Holdings Japan
Toronto-Dominion Bank (TD Bank) Canada
Wells Fargo United States
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