For financial sector organisations, effective risk assessment of clients and investees is a critical tool that informs lending, banking, and investment decisions. It includes assessing risks to human rights and the environment connected with client and investee business activities in their operations and value chains. We recognise that businesses have a responsibility to assess these risks under the UN Guiding Principles on Business and Human Rights. The responsibility to respect human rights is also increasingly reflected in legal frameworks.

... As financial institutions and ESG data providers, we face a particular challenge with our risk assessments of clients and investees: the challenge of civic space restrictions. Civic space restrictions create an ‘information black box,’ leaving us with blind spots about potential or actual negative impacts on human rights connected to our business. When civic space is restricted – meaning people are unable to organise, participate and communicate freely in their societies3 – we lack critical information about the human rights situation in those places, and we struggle to know if human rights have been harmed in connection with our clients and investees.

... In 2022, we (four financial institutions and one ESG data provider) came together to try to unpack this challenge in consultation with experts... By sharing our observations and ideas, we hope to advance the conversation across the financial sector about the critical importance of open and unrestricted civic space for our organisations to work effectively, fulfil our responsibility to respect human rights, and contribute to the realisation of more sustainable and just societies.