In April 2021, BankTrack and OECD Watch asked the Office of the High Commissioner for Human Rights to clarify whether banks have human rights responsibilities when it comes to the impacts of companies in which they hold shares on behalf of clients ("beneficial owners"). BankTrack and OECD watch asked OHCHR to address

1. Whether the relationship between a financial institution (FI) and a company in which it holds shares on behalf of a client as a custodian or nominee shareholder constitutes a ‘business relationship’ under the UN Guiding Principles on Business and Human Rights (UNGPs)
2. If they do, how should the FI ensure that it meets its responsibility to respect human rights, particularly in cases of severe human rights impacts.

In its response, OHCHR confirmed that purchasing and holding shares of an investee company constitutes a “business relationship” between a financial institution and an investee company under the UNGPs and that purchasing and holding shares in an investee company constitutes a linkage between the financial institution's “operation, product or service” and the investee company when the financial institution does so at the request and on behalf of a client. OHCHR also confirmed that:

• In all instances, financial institutions should have a policy commitment to respect all internationally recognized human rights that explains how it embeds human rights criteria across its activities, products, and services, which includes nominee shareholding.
• Financial institutions are expected to carry out ex-ante and ongoing human rights due diligence in order to know if their activities, products and services are connected with human rights risks and show how they take steps to address these risks.
• In order to prevent and mitigate harms, financial institutions are expected to take appropriate action.
• Where risks or adverse impacts are identified by nominee shareholders, they are expected to use and build their leverage. Where the nominee shareholder cannot use or build leverage with the beneficial owners sufficiently to address the impact, it will engage investee companies.
• Where human rights risks and adverse impacts connected to the financial institution's activities, products, and services are severe, the Guiding Principles expect them to formally report on how they address them.