Most banks still failing to deliver on UN business and human rights principles
Published on Wed, 2016-10-05 09:37
BankTrack recently published the second edition of its “Banking with Principles?” report, evaluating the progress of global private sector banks towards integrating the UN Guiding Principles on Business and Human Rights into their policies, due diligence processes and reporting. The report is an update to our December 2014 benchmarking exercise, with its scope expanded from 32 banks to 45, and aims to uncover what progress has been made by the banks, 18 months on from the previous report and five years from the establishment of the Guiding Principles.
We found that the level of implementation in the banking sector as a whole remains poor, and, perhaps more worryingly, that there are gaping holes in implementation by even the better performing banks.
This is not to say that progress has not been made. Half of the banks which were assessed in both reports made measurable progress, mainly by developing new or updated policies or improving their human rights reporting. However our research shows that, while some banks are implementing some of the UN Guiding Principles that are directed at business, others are being ignored completely.
Overall, such alarming gaps call into question whether the essentially self-regulatory approach of the UN Guiding Principles is working. For this reason, BankTrack supports the movement for a UN Treaty on business and human rights which will create new legal obligations for companies in a way the UN Guiding Principles do not. We are under no illusions – these efforts will take many years, and may not succeed – but they are necessary.
In the meantime, banks continue to be found to finance projects and companies connected with human rights abuses, and these findings underline the continuing need for civil society to hold banks to account for their human rights responsibilities in these cases.
The informal Thun Group of banks stated in response to our 2014 report that it was “premature” for BankTrack to benchmark banks on access to remedy, as it is “a topic that continues to be subject to much debate and has not been conclusively interpreted yet.” However, the UN Guiding Principles simply state that “business enterprises should establish or participate in effective operational-level grievance mechanisms for individuals and communities who may be adversely impacted.” The banking sector still has nothing to show against this requirement: no discussion paper, no cross-bank initiative to explore how this responsibility should be interpreted in practice, and certainly no grievance mechanisms.
By Ryan Brightwell. Ryan Brightwell is Researcher and Editor at BankTrack.