"How much Pain for Corporate Gain? Human rights violations and the role of the financial sector", 19 May 2022

This study uses a human rights framework to examine 14 funders on the German financial services market of corporate human rights abuses across the globe. Financial institutions play a central role in our economic system which puts corporate profits above the rights and welfare of people and the environment. They invest in mining companies that violate the rights of Indigenous Peoples, like Anglo American and HeidelbergCement, lend to European pesticide producers that sell their toxic products to countries with less stringent standards, such as Bayer and BASF, and facilitate the placement of bonds for arms companies profiting from the Yemen War that claimed the lives of more than 370 000 people, including Airbus, BAE and Raytheon. By financially supporting companies like the ones just mentioned, all of which have a record of human rights violations, without requiring compliance with the most basic human rights and environmental standards, these financial institutions are making money from the exploitation of people and the planet. All 22 companies examined in this study are doing far too little to curb the human rights violations and pollution they cause and to take the necessary remedial action. At the same time, there are a number of authoritative and internationally agreed standards and conventions that financial institutions, corporations and governments must adhere to: [...]

This report illustrates seven examples of financial flow between 14 financial institutions on the German market and 22 companies that have violated, among others, the right to health, to remedy, or to free prior and informed consent of Indigenous Peoples and of communities with customary tenure rights: [...]

Financial institutions must be aware that they are enabling human rights violations, even if they do not cause them themselves. It is partly due to their lack of policies, processes and procedures that human rights violations by their clients go undetected or without consequence. As long as this is the case, banks and life insurers cannot claim to have responsible investment and financing policies. We call on all financial institutions to overhaul commitments they have already made or are currently developing and to align them, at a minimum, with the UN Guiding Principles on Business and Human Rights with the ultimate goal to protect the rights of people affected by their clients’ operations. Any violation must trigger an immediate and pre-defined engagement process. If a company breaches hard exclusion criteria, the financial relationship must be terminated as quickly as possible with reference to its unacceptable business model.