A group of 47 investors coordinated by the Investor Alliance for Human Rights has signed a statement in support of BankTrack’s 2022 Global Human Rights Benchmark. The statement expresses concern regarding the human rights performance of banks as shown by the Benchmark’s findings, and calls on banks to “raise the ambition and increase the pace” of implementation of the Guiding Principles, as the UN has called for in its Roadmap for the Next Decade.

The Benchmark evaluated the disclosures of 50 of the world’s largest banks against a set of 14 criteria covering four key areas of the UN Guiding Principles on Business and Human Rights (UNGPs): (1) policy commitment, (2) human rights due diligence, (3) reporting, and (4) access to remedy. In addition, it assessed how banks respond to specific cases of adverse human rights impacts raised by civil society groups...

While modest improvements were evident compared to past rankings, the Benchmark found that 38 out of the 50 evaluated banks are implementing less than half of the human rights expectations outlined in the UNGPs. Moreover, of particular concern to investors, all but eight out of 50 banks fell short of reporting on specific human rights impacts, indicating that earlier progress on human rights disclosure has stalled. Another important gap is remedy, as no bank demonstrated how specific human rights harms that were identified through due diligence were remedied or managed. Banks also failed to provide a meaningful response to allegations of human rights violations in nearly three-quarters of cases.

This investor statement comes at a crucial time as European Union institutions begin the final stages of negotiations over the Corporate Sustainability Due Diligence Directive, or CS3D, which aims to create mandatory human rights and environmental due diligence rules for companies. The inclusion of the financial sector in the scope of the legislation has been a controversial issue, leading to the recent release of a statement by the UN Working Group on Business and Human Rights calling on policymakers to include the entire financial sector in the CS3D without creating “carveouts” or other exceptions...