From Principles to Practice | Finance at 15 Years of the UNGPs

About this Event

In June 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), establishing for the first time an authoritative global framework on the respective duties and responsibilities of states and businesses to protect, respect and remedy human rights impacts linked to business activity. Fifteen years on, in 2026, the UNGPs remain the reference framework shaping how governments, companies, investors and civil society understand and address these impacts, and are now more important than ever.

What was once dismissed as a radical vision – that companies, not just states, bear a responsibility for human rights – has become an established principle. The anniversary has prompted wide reflection across the business and human rights community on the UNGPs’ legacy and on what comes next. The UNGPs have also fed directly into binding legislative mechanisms, such as the EU Corporate Sustainability Due Diligence Directive (CSDDD) and a growing number of national human rights and environmental due diligence laws, translating what began as voluntary expectations into binding obligations.

In the financial sector while there is a longstanding history of FI’s engagement with human rights issues, the shift toward aligning investment and lending practices with international standards such as the UNGPs has only begun in earnest more recently. Since the UN Working Group’s “UNGPs 10+” project at the ten-year mark, the role of financial institutions – as investors, lenders and enablers of economic activity – has been increasingly recognized as a critical leverage point for advancing corporate respect for human rights.

For financial institutions, embedding the UNGPs is no longer only a matter of principle: it has become a source of trust with investors, regulators and clients, and a point of risk exposure where it is missing. UNEP Finance Initiative (UNEP FI) has supported this shift directly, through efforts like its UNEP FI Human Rights Toolkit, which helps financial institutions translate the UNGPs’ Protect, Respect and Remedy framework into practice, and through its Human Rights Community of Practice, which brings members together to share experience and align with the UNGPs.

Leading experts joining this event discussed how we are moving forward, and which challenges and opportunities lie ahead for the sector.

This event was co-organized by the UNEP Finance Initiative and the Geneva Environment Network, and co-sponsored by the Office of the High Commissioner for Human Rights, the UN Working Group on Business and Human Rights, and Swiss Sustainable Finance.

Speakers

Fernanda HOPENHAYM

Vice-Chairperson, UN Working Group on Business and Human Rights

Mauricio LAZALA

Chief, Business and Human Rights Section, Office of the High Commissioner for Human Rights

Aki UEDA

Stakeholder Engagement Manager, Japan Center for Engagement and Remedy on Business and Human Rights (JaCER)

Elaine O'BRIEN

Head of Sustainability Risk Management, Swiss Re

Caroline PUTMAN CRAMER

Director Romandie, Swiss Sustainable Finance (SSF)

Michael CLEMENTS

Director, Business and Human Rights Centre

Edoardo VIGNOTTO

Sustainable Investment Stewardship Specialist, Bank J. Safra Sarasin

Ulises QUERO

Business, Land and Environment Programme Manager, International Service for Human Rights

Joana PEDRO

Head of Social, UNEP Finance Initiative | Moderator

Video

Highlights

Summary

Joana PEDRO | Head of Social, UNEP Finance Initiative | Moderator

• It has been 15 years since the United Nations Guiding Principles on Business and Human Rights were released. This also means that it has been 15 years since they outlined the responsibilities for corporations.
• What actually comes to mind when I think about the United Nations Guiding Principles is also their practicality and pragmatism. That is one of the very interesting things for those who were also working on projects, working with corporates: how to bring this not just as an ambitious framework, just inspirational, but also very practical and doable.
• The practicality and durability of the framework has also been very important on the uptake during these 15 years, also within the financial sector.
• Some testaments to that uptake are the Human Rights Community of Practice we have at the United Nations Environment Programme Finance Initiative, with over 50 financial institutions globally.
• We also have a toolkit for financial institutions, a Human Rights Toolkit for Financial Institutions, bringing in and trying to translate what the United Nations Guiding Principles means for financial institutions.
• We are here to discuss what the most significant achievement is, what it has brought, but also where the implementation has fallen short. We will also be checking where the gaps are. We know that there are still gaps in implementation. Where are they?  What are the most important things moving forward?
• The event also aims to understand, moving forward to the next decade, what are the most important things that we see as priorities for the continuation of this uptake?

Keynote Reflection | 15 Years of UNGPs and the Financial Sector

Fernanda HOPENHAYM | Vice-Chairperson, UN Working Group on Business and Human Rights

• The Guiding Principles outline the corporate responsibility to respect human rights, including for investors. They are structured around three pillars.

1. State obligations to protect human rights, particularly in the context of business activities, which includes regulating adequately businesses and investors or financial institutions from different natures. But also making sure there are financial institutions that are associated with the State, whether it is national banks or any institution, so that the obligations that States not only have to, of course, ensure human rights are respected generally speaking in their jurisdictions, but also when it comes to financial actors operating in their territories, and, again, financial actors associated more with the State, like central banks, for example, and development banks, etc.
2. Independent responsibilities of private actors to make sure human rights are respected in the context of their activities. That is where, in the first decade since the Guiding Principles were adopted, there was a lot of work on businesses in the real economy, mostly, and a little bit on investors, a little bit on financial institutions.

• When the United Nations Guiding Principles turned 10, five years ago, the Working Group had an initiative called United Nations Guiding Principles+10, where we did a few stocktaking exercises to really understand the uptake by different actors and sectors of the Guiding Principles. We did one on the implementation of the Guiding Principles by investors of different natures, institutional investors, banks, etc.
• We found that there was some understanding, but it was really incipient in the financial sector in particular, and that a lot of work needed to be done. There was some understanding among some of the actors that there was a need to strengthen enabling environments for rights-respecting investment, which were emerging at the time but were really located in specific areas or with specific actors that were closer to this agenda or to this discussion.
• Also, governments were not providing concrete guidance for investors at the time. Now that has improved a little bit, and many of us have been working a lot on this and with these actors and this sector.
• There was mostly a gap in investor uptake. This has been an ongoing conversation since then with the different types of investors and the challenges that you face, the ones that belong to that sector, in implementing the Guiding Principles and making sure that the companies you invest in are conducting their operations in a rights-respecting manner.
• We definitely made recommendations for States. We made recommendations for institutional investors, including engaging with portfolio companies, using your leverage, which is something that the Guiding Principles already say, embedding human rights due diligence into Environmental, Social and Governance, or combining that with Environmental, Social and Governance efforts.
• We had also identified that human rights were mostly, if they appeared at all, under the “S” of ESG Environmental, Social and Governance, a little bit connected to the social issues. But human rights due diligence is different, and respecting human rights should be across the full spectrum of ESG efforts and operations, in fact.
• Then we did two things in writing
  1. A specific study on finance and human rights in Latin America and the Caribbean in 2024. We recommended that financial institutions adopt a human rights policy and implement human rights due diligence as part of their independent responsibility to respect human rights in their own operations so, to make sure that there is not any harmful practice for human rights in their own operations, for example, in providing financial services, no discrimination, etc., but also in any other activity, which includes their investments, of course, namely and most importantly, that they are linked to or directly contributing to.
• That is where we have found most of the challenges in understanding the difference between ESG and a human rights approach and in understanding human rights due diligence as a cross-cutting activity that should, again, be embedded as part of the operations in this double materiality approach, and to conduct that due diligence in their portfolios.
• From the rights-holder perspective, from the person or the communities that are affected by business operations, that is the most important part of the work financial institutions should be doing, and probably our colleagues from civil society will testify to that.
• Then, of course, the differences between institutional investors and the way they operate, and commercial banks and the way they operate. It is different: the type of due diligence that is done for a loan than when you buy stocks or you invest in the stock market, etc. So all of those nuances are there.
• That really underlines the difference between human rights due diligence and Environmental, Social and Governance.

2. A report on Environmental, Social and Governance investors and human rights, focusing on underlining the importance of achieving policy coherence within the operations of the financial sector.

• This is a very important element that needs to happen by ensuring, on the side of the States, that the legislation associated with Environmental, Social and Governance and sustainability are aligned with international human rights standards like the Guiding Principles.
• From the financial institution perspective, it is not only about trying or thinking of embedding human rights due diligence into ESG investment or green investment, or into parts of your operations that are more associated with sustainability and social issues, but generally speaking throughout all your investments and using leverage instead of cutting and running. Sometimes the investment is really important, sometimes it is, but it needs to be the last resort because in many cases, your influence and your dialogue and your requirements for your investees is really important and can create real change on the ground for people.
• And also that remedy is part of those processes and it is part of the discussion many times.

3. Pillar three, access to remedy, is often perceived as a forgotten pillar, but we have done a lot of work on pillar three. That does not mean that companies, including investors, work a lot on remedy. That is where we have a really weak part of the chain that needs to be strengthened.

• Some, for example, development banks are creating so-called remedy frameworks, which is interesting. That is something that is still missing with institutional investors, commercial banks, so the private part of the financial world.
• From the rights-holder perspective, contribution to remedy is essential, and it is something we really need to work on and start moving from capacity building, which is really important and needs to continually be strengthened and updated as the world changes and we move forward to concrete practice and action.

Panel Discussion | What is the most significant achievement of these last 15 years? Where has the implementation fallen short? And what do you think is a priority moving forward?

Mauricio LAZALA | Chief, Business and Human Rights Section, Office of the High Commissioner for Human Rights

• The most significant achievement of the United Nations Guiding Principles in terms of the financial sector is that it fundamentally changed the expectation placed on business, banks, and financial institutions.
• Fifteen years ago, the idea that companies have an independent responsibility to respect human rights was still contested. Today, it is widely accepted, and the United Nations Guiding Principles have established a common language framework that is now used by governments, companies, investors, lenders, regulators, civil society, and courts.
• In the financial sector, the United Nations Guiding Principles help clarify that human rights responsibilities do not stop at a company’s own operations, but that financial institutions can be connected to impacts through their lending, investment, and other financial services, and therefore have a responsibility of their own to identify risks, use leverage, and seek to prevent and mitigate harm.
• Our work over the years has consistently emphasized that financial relationships, including minority shareholder holdings and other forms of investment, can create responsibilities under the United Nations Guiding Principles. There is also more elaboration on the involvement framework, and we have publications showing that financial institutions can be involved in all three levels of involvement: possession, contribution, and direct linkage, although causation will be rare.
• The main shortcoming is that implementation has not sufficiently changed outcomes for people.
• Many financial institutions now have human rights policies, ESG frameworks, and due diligence processes, but too often discussions remain focused on risk to the institution rather than risk to rights holders.
• The UN Guiding Principles are very clear that due diligence is about identifying and addressing risk to people, yet communities affected by harmful projects, workers in global supply chains, and human rights defenders frequently still struggle to see evidence that financial institutions have used their leverage effectively or that they have access to remedy when harms occur.
• Curiously, some established banks already have good grievance mechanisms in their design that comply with the effectiveness criteria of the UN Guiding Principles.
• But some of these banks have not received a single grievance through these grievance mechanisms. So something needs to be adjusted as we also continue to see uncertainty in some parts of the sector about what it means to be linked to impacts through financial and investment relationships.
• The Office of the High Commissioner for Human Rights’ guidance has repeatedly clarified that questions of leverage do not determine whether responsibility exists. They determine how the responsibility should be exercised.
• The single most important priority in the next decade or 15 years is to make leverage count.
• The next decade or 15 years or 30 years should not be about creating more human rights commitments, but it should be about systematically using the influence that financial institutions already have.
• When serious human rights risks are identified, financial institutions should engage clients and investee companies earlier, collaborate with peers when necessary, use stewardship tools more strategically, escalate where progress is absent, and be prepared to reassess relationships when severe harms persist.
• The question should no longer be whether financial institutions have responsibility. The question is whether they are using the leverage available to them to deliver better outcomes for people.
• If 15 years from now we can say that human rights due diligence in financial institutions routinely changes corporate behavior and improves access to remedy for affected people, then we will have moved from principle to practice in a truly meaningful way.

Aki UEDA | Stakeholder Engagement Manager, Japan Center for Engagement and Remedy on Business and Human Rights (JaCER)

• The Japan Center for Engagement and Remedy on Business and Human Rights provides Japan’s non-judicial grievance platform for business and human rights, and we support companies in addressing human rights grievances through engagement and remedy in line with the United Nations Guiding Principles.
• Today, more than 100 Japanese companies participate in our platform, and we have received more than 400 grievances since 2022.
• The most significant achievement of the UNGPs is that business and human rights have increasingly become part of mainstream business practice rather than a niche issue.
• So, in Japan, in 2023, Keidanren, which is a group of companies in Japan, conducted a survey that found that 76% of responding companies were taking action based on the UN Guiding Principles, more than double the level in 2020. And among companies with more than 5,000 employees, the figure was over 95%.
• However, some significant challenges remain.
• Through our work at the Japan Center for Engagement and Remedy on Business and Human Rights, we see that some companies still approach grievances in a formalistic way. Having human rights policies and due diligence processes in place does not necessarily mean that affected people receive effective remedy.
• Closing this gap between process and meaningful outcomes for rights holders remains a major challenge.
• And lastly, a key priority for financial institutions is to reconcile banking confidentiality with the responsibility to respect human rights.
• Banks have strict confidentiality obligations to their customers. But at the same time, the UN Guiding Principles expect them to engage with affected stakeholders and use their leverage to address adverse human rights impacts.
• We therefore need practical frameworks that allow financial institutions to engage meaningfully with stakeholders and contribute to remedy while fully complying with their legal obligations of confidentiality.

Elaine O’BRIEN | Head of Sustainability Risk Management, Swiss Re

• Speaking about practicality, because a lot of the things with human rights due diligence have been statements of responsibility, but actually what the United Nations Guiding Principles have really done is to bring in a practical risk management framework. Indeed, I sit within risk management, and within my team we have human rights due diligence processes because it really is a standardized risk management process.
• If I take a step back, looking at financial institutions more generally, we are always one or two steps removed from where the risk actually would happen. This is always going to be quite a challenge. On top of this, we are connected to the whole world.
• It is a challenge, but also an opportunity, because when you are dealing with so many diverse topics at once, a tool like the United Nations Guiding Principles supports a more standardized approach really does help. This avoids getting into very philosophical debates about every single risk, because everyone can have a different opinion.
• Swiss Re is a particular industry. We insure insurance companies, but we also have corporate insurance, and how we look at this risk.
• The human rights due diligence is part of the ESG risk framework. The S was social, but we often say social/human rights, because human rights in and of itself has its importance.
• What we do is we identify the potential adverse risks that could be in our portfolio, the type of business that we write.
• Also, this idea of cause, contribute, and linked to, from a day-to-day perspective, is extremely useful, because again, these philosophical debates: where do we need to take action if our counterpart is directly causing, which is rarer, or linked to how you do the human rights due diligence.
• From there, assessing the severity, whether mitigation has taken place- all these concepts that really come from the United Nations Guiding Principles bring a framework that people can follow and can be very easily explained. Also, with the United Nations label, it always helps as well, of course.
• The value of this standardized process. We talk here a lot about human rights, but from a business perspective, it goes much further than that.
• So, for instance, as a company managing these risks, it helps against potential litigation, regulatory intervention, and also reputational risks.
• That is just looking at ourselves as a company. But if you think as a risk manager, and I sit within our Group Risk Management function, you can see that if there are poor human rights practices by a company or in a project, it can be an indication that the resilience of the project is not very strong.
• Often, poor risk management that leads to environmental damage and human rights abuses can be an indication of bigger risks. So, it is very good to have this way of looking at it from due diligence, because it can have broader implications on the risk of a project.
• So again, very practical beyond corporate responsibility or aspiration, this is helpful.
• Then, just to speak about the actions, and some of them were mentioned earlier too. When you have this initial due diligence, you have the framework, you can identify the risks.
• From a practical perspective, what happens next is that there can be further due diligence. The concept of the human rights impact assessment is extremely helpful, because it is understood that when we ask, okay, there may be an issue here, does the company or the project have a human rights impact assessment? That enables us to look more deeply.
• The engagement with the clients is also an important part. When you can actually engage with a client based on a concept like the United Nations Guiding Principles, you can have these discussions on what has happened, if there is a controversy, what mitigations they have taken, the actions that they are taking, and getting evidence of this.
• And always, as a very last resort, it is to not do business. That is an important one, because often you are connected very much that if to be involved at all is a problem. But this engagement part, bringing in these processes to have this as a risk management standard, is extremely powerful.
• So, it is really the last resort to step away from the business.
• Then, maybe to bring it all together and to see, in short, over 15 years, what has been the big impact of this, I see that it is really coming from this aspiration on being a responsible company to a practical risk management tool.
• There is better risk identification, there is more consistent decision-making across the companies, and early identification of emerging risks. As I mentioned, we talk about human rights risks, but knowing these helps with many other risks that we manage, then, a strong client dialogue and overall more resilient business relationships is also a very strong indication.

Caroline PUTMAN CRAMER | Director Romandie, Swiss Sustainable Finance (SSF)

• In terms of progress, we can appreciate how the United Nations Guiding Principles have served to raise awareness, clarify expectations, and build a positive momentum around these issues.
• When it comes to non-financial reporting, speaking of the Swiss market, we have the Swiss Code of Obligations, which requires financial institutions to report on social issues, human rights, and employee-related matters, amongst other things, and this is since 2022.
• In terms of human rights due diligence, Switzerland has a National Action Plan, which serves as its implementation instrument of the United Nations Guiding Principles. The new, or the current, action plan extending until 2027 brings in new measures which recognize the special role of financial institutions, precisely speaking of the leverage and the potential influence that they can have on companies, and really promotes or encourages them to provide sustainable products and services, thus contributing to respect for human rights.
• There is currently a proposal for a new federal law on sustainable corporate governance, which was the Federal Council’s response to the popular initiative for responsible large corporations. This proposal aims to align Switzerland with European Union regulations and international frameworks, specifically concerning due diligence obligations and sustainable reporting.
• We have yet to see what the final version will be, but these are still positive elements.
• Where we are falling short, looking at the current drivers for addressing human rights today from the perspective of financial institutions, it is still often regulatory requirements and reputational considerations, showing that the approach is generally a reactive one. We have yet to see a more systematic, proactive approach.
• In this vein, what I perceive is that investors have yet to leap systematically to incorporate socially related risks, which are often seen as less tangible and harder to quantify, into traditional risk models in order to understand how they translate into financial risk.
• The current standard tools do not typically account for avoided costs or strategic gains, and the use of these standard tools does not necessarily take into account long-term enterprise value. Many benefits that we know of addressing human rights risks are harder to quantify in these standard financial tools and materialize not in the short term, but rather in the medium or long term.
• Beyond this, there are also still important capacity gaps when it comes to understanding the importance of addressing human rights risks and impacts and to properly embed human rights due diligence in investment decisions and risk frameworks.
• Finally, to speak of priorities for financial institutions going forward, investing in building capacity is still vital. I also speak to a number of great studies that exist, which have been published by the United Nations Environment Programme on human rights performance and competitiveness. There is the FAST initiative also, which speaks about an integrated impact business case.
• There are plenty of studies, elements and evidence to show the business case and the materiality of addressing human rights risks. Now we need to disseminate these.
• We need to have a dialogue between the financial sector, the real economy, the United Nations, civil society, and other stakeholders, and bring it more into practice.
• And finally, just to say, for Swiss Sustainable Finance, this is something that we have the ambition to work more in this area. So, if anyone is interested in speaking to us or collaborating, obviously together with the Geneva ecosystem and building on existing resources, we are encouragingly seeing that this is something that is requested by our members.

Michael CLEMENTS | Director, Business and Human Rights Centre

• We all agree that 15 years ago, the idea that business, that finance, should systematically identify and address their impacts on human rights was barely there. And today, this is widely accepted.
• There is a lot to celebrate about this fundamental shift in expectations. Certainly, the UN Guiding Principles, in their infancy and to today, pose a quite clear challenge to business and financial institutions to ask whether human and environmental costs associated with economic activity can simply continue to be externalized onto workers and communities, to rights holders. And of course, the answer to that challenge, as the UN Guiding Principles articulate, is no.
• They have also given governments a real framework for thinking much more seriously about their duty to protect people from corporate abuse. And that has helped to create the foundations for the movement towards mandatory human rights and environmental due diligence.
• As we have seen in Europe and increasingly in the global majority, and particularly for civil society, they have given us a common language and a really powerful set of levers with which to demand change.
• But 15 years is also an appropriate moment to recall that the United Nations Guiding Principles were always intended to be a floor and not a ceiling. And too often, we still see the reverse. Companies and financial institutions treat compliance with the United Nations Guiding Principles as the sort of apex of what society should expect from them, while many in the private sector, as we have heard from others, still fall well short even of that compliance.
• Our own analysis at the Centre, as Joana highlighted, across multiple sectors, including finance, consistently reveals a relatively small cluster of leading business practice, another group that is reaching towards better practice, and a much larger part of the private sector that is still lagging.
• So our challenge for the next period, from our perspective and as others have said, is to ensure that we are really moving from recognition of the United Nations Guiding Principles as the genuine normative breakthrough that they were and are, to actual transformation of business and investment models that continue to generate harm.
• That means shifting incentives away from a sole focus on short-term returns towards longer-term sustainable value creation. It means ending this routine externalization of social and environmental costs onto workers and communities, human rights defenders, including by using your leverage and adjusting how risks are assessed.
• It also means asking an even more ambitious question of finance: not simply whether capital is avoiding generating harm, but whether it is actively contributing to economies in which prosperity, opportunity, and power can be more fairly shared.
• We obviously still have some way to go in all of these areas, as we have heard, so I will not repeat those excellent contributions. But it is why mandatory human rights and environmental due diligence remains a really important next step in the life of the Guiding Principles.
• Voluntary leadership matters enormously, and it has mattered enormously, but 15 years of experience does tell us that leadership by a few cannot substitute for rules that raise the floor for everyone.
• The United Nations Guiding Principles have given us something extraordinarily valuable, which is, of course, that global norm that says that economic success should not be built on harm to people.
• But the task for this next period is to turn that principle more fully into practice.
• The idea would be that respect for human rights is not an exceptional feature of leading financial institutions, but a basic condition of how capital is deployed.

Edoardo VIGNOTTO | Sustainable Investment Stewardship Specialist, Bank J. Safra Sarasin

• In the coming years, financial institutions should prioritize using their unique role to advance all three pillars of the principles.
• Asset managers have a really unique view because they are at the intersection of so many different things. They see companies, they see clients, they are in touch with regulation, and they can use this knowledge to engage with public policy and bring their view. Here, the prioritization should really be having regulations that are forward-looking and that bring certainty in the process.
• Sometimes, there is uncertainty in regulation and how it will play out, and that can be a real blocker for real human rights impact and bring a lot of inertia in the company. Here, the ask of managers should really be for clarity in the regulation process and in what to expect in the future for their company.
• Moving to the second pillar, the respect one. Here, the biggest impact an asset manager can have is in engaging with its own portfolio companies. In the last decade, many companies have done quite well in developing due diligence frameworks and more on the compliance side.
• But now the natural next step is really to ask a company to embed human rights considerations in their business strategy, in their capital allocation decisions, in how they think about where to expand and where not, and in the type of operations that they do. Because if you stay at the due diligence approach, this is of course important, but it is more of a screening out of risk. It does not really integrate human rights into your business case.
• Then, moving to the third pillar, the remedy pillar. Also here, many companies now have grievance processes. They are often also reported and well described, but often the focus is on the processes and not on the impact side, which is very normal because before having impact, you need to have processes.
• But now, also here, the natural next step is really to shift the focus to the impact, to shift the focus of your remedy framework not only on the grievance part, and really try to change from process to impact.

Ulises QUERO | Business, Land and Environment Programme Manager, International Service for Human Rights

• All the different developments in this area are also thanks to human rights defenders. They are the ones who are pushing the business and human rights agenda, and they are the ones who were also pushing for the development of the Guiding Principles. Sometimes, they are the ones who are first forgotten.
• Despite this critical role that they have played in the development of this framework, they are still harassed, intimidated, attacked, and murdered, and they continue at the front line defending not only their own rights but also the rights of their communities and the environment.
• One of the main developments that we have seen since the UN Guiding Principles is also the recognition that business and financial institutions have a responsibility to protect human rights defenders. While this is mentioned in the Guiding Principles, this has been further developed also by the Working Group. Five years ago, in 2021, the Working Group developed guidance on how to respect the rights of human rights defenders. These guidelines provided really good recommendations, not only for states but also for financial institutions and businesses on how to incorporate that in different aspects of their operations, which basically touch upon the different pillars that the Guiding Principles have.
• Sometimes we hear from business partners that they do not know what a human rights defender is, or they have negative narratives regarding human rights defenders because some of them still see them as obstructing their operations. One of the main things that we need to start changing is the narrative, because we have seen as well how human rights defenders are not only opposing these operations, but they are also providing alternatives on how to better incorporate those operations.
• Sometimes what they are just asking is consultation. Sometimes what they are asking is benefit sharing, and sometimes what happens is that they are not listened to.
• There is also already an important framework of what a human rights defender is. Let us not forget there is also a UN Human Rights Defenders Declaration that is already 28 years old, and since then there have also been developments on what the responsibilities of businesses are in the context of the UN Declaration.
• When we see the UN Declaration on Human Rights Defenders and the Guiding Principles, we think that we already have a really good framework to really protect human rights defenders and communities.
• Financial institutions and businesses can implement various steps to improve and to really respect those rights of defenders.
  • Committing to a policy on zero attacks against human rights defenders, and this should also include strategic lawsuits against public participation, which we have seen has been one of the common ways in which businesses are attacking human rights defenders.
  • Implement this policy, and implement it also through operational procedures. For example, financial institutions can already incorporate these elements in pre-investment screening and also ongoing screening of the operations of their business partners.
  • Set clear expectations. Once you enter into a relationship with a business partner, you can already set that you also have this policy of zero attacks and that you are expecting them to also comply with that policy.
• We need to also integrate the risk of human rights defenders as part of the due diligence, and this also includes consulting human rights defenders. One of the panelists already talked about engagement, and financial institutions should also start engaging with human rights defenders to understand what the risks are, so they can also set these expectations when they start operations.
• Rapid response: once you know that this is happening, also talk to the business partners, respond quickly on these issues, and even consider stopping operations and the relationship.
• Grievance mechanisms. We have discussed that, but we have seen as well that they are not accessible. Once I tried to do an exercise to find the grievance mechanism of one development bank, it took me almost one hour, and also the availability of languages is not there.
• So, imagine trying to find that grievance mechanism for an indigenous person who is working in Brazil and then the information is only in English. Accessibility should also be very important.
• Finally, the problem right now is not the legal framework or the standards. They are there. The problem is implementation, and we need to start moving forward to identifying risk not as a business or financial risk, but as a people’s risk.
• We are talking about people, we are talking about communities, we are talking about defenders. So we need to start changing that narrative, and basically we end up not only with political will from the state perspective, but also with business and financial will. Then, with that, we will actually move forward on the implementation of these standards.

Open Discussion

Question:

• One of the things that comes to mind, of course, when we deal with the different companies is to see their specific behavior. But then we have an issue of what are the basic rules of the industry in which you are acting, because, of course, all of the different commercial partners or industrial partners have to follow these rules; otherwise, you lose against your partners.
• Some of the issues go beyond just the individual behavior of companies, but precisely on how the business is conducted generally speaking, because if you do not follow it, you are just out of business, and that is where part of the problem lies.
• I have a question addressed to Mrs. O’Brien because we have a relevant example with climate change. We see now, and there are discussions in several countries, where we see that because of the massive damage, insurers are starting to say, and that has happened, for example, in the United States- “We are not going to insure these damages anymore,” which basically leaves people in harm without any protection and without any remedy.
• Then, how does the reinsurance company, and also this business sector, see how an industry should start to change the way it proceeds as an industry, not just as a company, but as an industry, so that we start to move away, because now we are really here hitting the ground, and we are definitely at a junction between environment and human rights issues.

Elaine O’BRIEN | Head of Sustainability Risk Management, Swiss Re

• This question is a very relevant question for the insurance industry.
• This topic of affordability, which is a challenge in itself, and obviously climate change is a defining factor of our current times as well. At Swiss Re, for instance, we have our net-zero strategy. We have a net zero 2050 in place, and we are working towards that.
• It is also an approach that we have a climate transition plan. It is approved every year at our shareholder meeting, our annual general meeting. And we take this approach to transition with our clients.
• So there is this idea that, with a climate transition plan, it links to engagement, so that to come off any risk or to pull away from a business is the last resort. So on our net-zero pathway, we have an engagement approach that we really want to transition with the companies in the real economy that are also transitioning.
• So that is on that side of it. And then relating to affordability, what is interesting thing as an insurer, and especially a reinsurer, we have so much data on this. We can see what adaptation and a lot of adaptation needs to be done.
• We still see developments happening, like buildings being done in low-lying areas. Urbanization is a big topic as well. There are more and more people in the world moving to urban centers, and if those urban centers are then having buildings that are built on floodplains, while climate change is increasing the risk, also this urbanization is increasing the risk.
• Maybe there are many different actors in the public sector, city planning, even down to that level of public sector, also the developers of these large projects. They all need to consider climate change and use the data that is available.
• And that is something we also work on within our company: we have this data, we engage with our clients, we actively have a solution. For instance, if we have corporate clients who are building large infrastructure, they can plan climate into their infrastructure.
• So maybe that is from the two different angles.

Question:

• Do you also have a strategy in the engagement with states, so that states also start to move much quicker than what we are seeing right now?
• Changing the rules of the industry, because, of course, all of the industries function in a legal environment, and we see that more and more, in a lot of issues, the legal environment is not relevant anymore in order to challenge this.
• How would you engage on this political aspect? You probably have a public policy sector in your company. And I was wondering, here, do you have precisely a strategy that would, precisely, for example, help us also to work more broadly together on some of these issues in several forums?

Elaine O’BRIEN | Head of Sustainability Risk Management, Swiss Re

• We actually have a department or an area business unit of the company, Public Sector Solutions, that does exactly that.
• So, given, for instance, using this data, if there are some states that are doing big infrastructure, state-run infrastructure, we have Public Sector Solutions, where we work directly with the public sector on that.
• That is also part of our business strategy as well, because it does make business sense. We are a 160-year-old company. We want to be around another 160 years. If we can partner with the corporates and the public sector, who are taking these insights on climate adaptation into their considerations, we do that.
• So that is why we also have this Public Sector Solutions work as well.

Question

• If a bank is using its leverage, financial institutions are using their leverage, but, of course, not all of that is being done because of confidentiality. What is being done is also [not publicly disclosed].
• What are your thoughts on how to balance this, that the leverage that is needed and what is publicly spoken about?

Mauricio LAZALA | Chief, Business and Human Rights Section, Office of the High Commissioner for Human Rights

• Leverage does not need to be in the public domain. The important thing is to use the leverage to achieve the right human rights outcomes, whether that is done behind closed doors or in a public room or with a public statement. That is less important. What is important is that the leverage is being used in accordance with the international instruments.
• If confidentiality is an issue, please, by all means, feel free to use your leverage behind closed doors in a confidential manner, but use it effectively.
• As we have heard from experts who focus on the banking industry and the financial sector, confidentiality is often not a hard rule that is completely prevents companies from using it. Confidentiality can many times be a matter of choice of the banks and how they can really use confidentiality.
• There, we have seen examples in other areas where banks are more flexible regarding the confidentiality rules. For instance, in Switzerland, we have seen over the decades a progression towards treating confidentiality in a more flexible way when it is about compliance matters regarding illicit funds, etc., getting into Swiss banks.
• It is not the same situation where Switzerland was 50 years ago, let us say. So confidentiality is something many times of choice of the banks ‘ choice, and they can certainly choose to relax that a bit when it is about important matters.
• We would argue that respecting human rights is of utmost importance for any company, not least because, as regarding the business case that Caroline mentioned, it exposes banks to very significant risk: litigation, protest, loss of consumer confidence, loss of workers’ confidence, loss of investors’ confidence. Therefore, let us be practical about how we treat confidentiality.

Edoardo VIGNOTTO | Sustainable Investment Stewardship Specialist, Bank J. Safra Sarasin

• That may connect the two questions, because you were saying that for a company, of course, it operates inside an industry and it cannot decide to put as many resources as it wants in human rights or in any specific topic, because this is a cost. And if their competitors are not doing the same, this, of course, makes them less productive, less competitive in the market.
• You said that there is a lot of freedom of choice in confidentiality. This could also be one of these kinds of factors that a bank can decide to have some freedom of choice, but this has some business implications, and so it has also needed to reason with respect to public relations. And this is where regulation and really the industry perspective is super important.
• And so, even if you, as a specific company, feel, “I cannot go there,” even if you will go there because then you are uncompetitive, you can try to shift the whole industry. And then you can still do a lot of work with industry associations, engaging with the regulator, and with this more level playing field that is very important.
• Because that is true. Many topics have a cost, and you are still doing a business; you are still in an industry; you still have competitors that maybe are not doing that. You will always have some free riders that exactly try to not do that.

Question 3:

• Some insights about FAST, which is UNDP’s flagship within the Sustainable Finance Hub and works in close collaboration with Business and Human Rights.
• We do a lot of engagement with financial actors on capacity building, working with them to build capacity on human rights due diligence, de-risking, and risk management systems. There is a lot of work with survivors on survivor inclusion and access to financial services, and a lot of engagement with national regulators on due diligence and supply chain laws across different geographies.
• Was there any direct guidance for financial institutions or for engagement with MSMEs? Often, the leverage is a lot harder when it comes to MSMEs versus a larger conglomerate.
• Is there any special guidance or engagement rule that is followed by a financial actor when they engage with smaller or medium enterprises?

Elaine O’BRIEN | Head of Sustainability Risk Management, Swiss Re

• My company does not have the same team. A big challenge is when you are a small company and you get different requests from many different players that are similar but different.
• Even in Germany, with the Lieferkettengesetz, I have just heard this through people I know in the industry. That was already a challenge because the requests were very varied. So anything standardized makes it much, much easier for these companies because then at least they do it once for one counterparty, and then they have it for all.

Ulises QUERO | Business, Land and Environment Programme Manager, International Service for Human Rights

• That is more indirect input I have from civil society. What we have created, actually together with the Business & Human Rights Resource Centre, is a collaboration as well. We have a series of indicators. Of course, this is really focused on improving engagement and support and respect of the rights of human rights defenders, and it does touch upon different elements that you were mentioning.
• That is available. I am also happy to share it. In total, there are 10 indicators with sub-indicators that we think would actually help to support and improve in that regard.

Joana PEDRO | Head of Social, UNEP Finance Initiative | Moderator

• The UNEP Finance Initiative, within the Principles for Responsible Banking, has specific work on it. It has been more to this day on financial health and inclusion. Financial inclusion is not only about access to bank accounts, but also about ensuring that people are part of the system, better off, and able to uphold their rights.
• Within that, we are also starting to work now in this next semester on how to do client engagement with SMEs, with smaller enterprises. So, we will be doing that work starting in September.
• We are already in conversations through FAST and collaborating, but also happy to continue working.

Joana PEDRO | Head of Social, UNEP Finance Initiative | Moderator

• UNEP FI has already highlighted the importance of human rights 30 years ago, with what was at the time quite advanced thinking on the importance of human rights and the responsibility in relation to human rights for investors at the time. Having the UNGPs as a base and as a framework to work from has helped a lot in how we can frame the work, from a UN practitioners’ perspective, but also a lot from the ground, having something to hold and that can hold responsibility towards companies, towards financial institutions.
• We have a human rights toolkit available on our website, and that toolkit has all the information that we could find. It is being updated. It was revised by the working group: it was revised by OHCHR, Business & Human Rights Resource Centre, and several other partners. It has all the information that we could find out there that is relevant for a financial institution if they want to comply with UNGPs and move forward, not the ceiling, not the ceiling, so move forward, not only from complying but to go more.
• It is also, of course, relevant for civil society to know what is already out there, what financial institutions already have, and for others in the ecosystem. We also work with the community of practice. If there are banks and insurers online that are not yet part of it, they are welcome to be part of this community of practice on human rights.
• We will continue working, and hopefully working towards this, being part of these 15 years and changing, going from this agreement that indeed there is a responsibility from financial institutions in relation to human rights. We are there. But how does that change the realities of people? The realities of people who are being affected by a project that is being financed, or an account that is not being, or credit that is not being given because of discrimination. How, in reality, in people’s lives, can the UNGPs and the work that we are doing change and move the work forward?

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