A global emergency…
Human rights are under attack around the world, and businesses can be part of the problem or part of the solution. The size and power of transnational companies continues to grow, and corporate impunity for human rights violations is rife. Business sectors the world over see structural and sustained violation of labour rights, or even outright slavery issues. New infrastructure, mining and agriculture projects often entail land grabs, forced relocations, lack of community consent and threats to livelihoods, while several other sectors from technology to defence pose their own specific risks. Meanwhile, democracy is suffering a sustained decline, with international business often supporting oppressive states with arms, security or finance.
The UN Guiding Principles on Business and Human Rights (UNGPs) in 2011 authoritatively established that corporations have a responsibility to respect human rights, independently of the duties of states, and that this is part of a company’s ‘social licence’ to operate. This requires them to conduct human rights due diligence to assess actual and potential human rights impacts, act upon the findings, track responses and communicate how impacts are addressed. However the UNGPs are not legally binding in themselves; implementation is patchy; and examples of communities achieving remediatiation when their human rights are violated are all too rare. While efforts to create an international binding treaty governing transnational corporations and human rights appear to have no end in sight, efforts to establish mandatory human rights responsibilities are, in a hopeful development.
…linked to other emergencies
The human rights emergency is deeply intertwined with the other global emergencies we face. Climate change poses a direct threat to the right to life and is already affecting human security on a massive scale. Similarly, the ongoing destruction of vast swaths of Indigenous peoples’ territories, often without their Free, Prior and Informed Consent, not only poses a massive threat to nature but also constitutes a severe violation of their own rights, including to land, clean air and water. The coronavirus pandemic also disproportionately impacted upon the poor and dispossessed, violating workers’ rights and livelihoods, as well as impacting health as it raged through the world.
But these same human rights are also a crucial tool in the fight-back against corporations that cause climate change, as the landmark Shell ruling of 2021 showed. Communities are also succeeding in many of their battles to stop such developments proceeding, and the October 2021 recognition of the human right to a clean, healthy and sustainable environment by the UN Human Rights Council should further strengthen the ability of communities to ensure these rights are respected.
Role of banks
Banks, like all businesses, have a responsibility to respect human rights, and have the potential to impact upon all these rights, both positively and negatively, and in a number of ways. The UNGPs set out that businesses can cause, contribute or be directly linked to human rights abuses.
- Banks can cause human rights violations themselves, for example through racist practices like ‘redlining’ in mortgage provision.
- They can also contribute to human rights violations, for example where they facilitate harm caused by a client. In such cases, they will also be responsible for cooperating in remediating the impact.
- Or banks can be directly linked to human rights violations, through lending or other financial support for companies responsible for violating human rights.
Advice from the UN Office of the High Commissioner for Human Rights sets out the factors that can influence the nature of the relationship to the impact. Banks are likely to have contributed to human rights violations through actions including financing oil pipelines that have violated Indigenous Peoples’ rights, providing huge secret loans to highly-indebted countries, and financing construction or infrastructure projects which establish or expand illegal settlements.
Since the advent of the UNGPs, several banking sector and multi-stakeholder initiatives have aimed to clarify banks’ responsibilities to respect human rights. These include the Thun Group, Dutch Banking Sector Initiative on Human Rights, which concluded in 2020, and the OECD Project for Responsible Business Conduct in the Financial Sector.
What banks must do
The overall aim of the Banks and Human Rights campaign is to ensure private sector banks respect human rights in all their operations, and particularly in their provision of finance, and stop bank finance for companies and projects that cause severe human rights abuses. To achieve this, banks must:
- Publicly commit to respect human rights;
- Implement human rights due diligence to assess actual and potential impacts, act upon the findings and track responses;
- Avoid financing companies that cause human rights violations that are systematic or that they refuse to address;
- Report on how they have managed and remedied specific adverse impacts, with a focus on the most severe impacts identified by the bank;
- Develop effective channels to address grievances from anyone impacted by their activities;
- Commit to transparency, for example so that affected communities can access information on who is financing projects that affect them.
What BankTrack does
Our human rights campaign focuses on the following areas:
Benchmarking banks on implementation of UNGPs: BankTrack's Human Rights Benchmark assesses large international banks on the extent to which they are fully implementing the UN Guiding Principles. We published our most recent Global Benchmark in November 2022, and have also published Regional Benchmarks for Africa (2021) and Asia (2022).
Advocating for better human rights practices by banks: Significant publications from our Human Rights campaign include the following:
- Our series of Human Rights Impact Briefings: on Labour standards violations in IOI Corporation's Malaysian plantations (2016); Drummond and paramilitary violence in Colombia (2016); and Banks and Traffigura & Vitol's Dirty Diesel (2016).
- How banks contribute to human rights violations, December 2017
- Developing Effective Grievance Mechanisms in the Banking Sector, July 2018, with Oxfam Australia (webinar recording here)
- “We are unable to comment on specific customers…”, March 2019
Engaging with banks, banking sector and multilateral initiatives: As part of the human rights campaign, BankTrack’s engagement with sector initiatives has included the Thun Group (see above), the Dutch Banking Sector Agreement (DBSA) (2016 to 2020), and acted as a member of the Advisory Group to the OECD Project for Responsible Business Conduct in the Financial Sector (see ‘Banks and the OECD Guidelines’).
For more information on historic publications as part of the BankTrack Human Rights Campaign, see our Campaign Timeline.
BankTrack Global Human Rights Benchmark (2022)
BankTrack’s 2022 Human Rights Benchmark assessed 50 of the largest commercial banks globally. It found that no commercial banks are fully meeting the UN Guiding Principles. Although there was some progress since 2019, no banks were ranked as 'leaders' and there has been a lack of action to address key gaps on reporting and remedy.
- Full report (PDF)
- Media release
- Twitter thread with infographics
- Webinar presentation (YouTube, 38 minutes)
See results of our regional Human Rights Benchmarks and earlier benchmarks on our dedicated page on the BankTrack Human Rights Benchmark, here.