Human Rights Guidance Tool for the Financial Sector

The UN Framework and Guiding Principles on Business and Human Rights

For some years, business leaders, civil society and governments have been exploring the issue of human rights and business. Multinational, national and local businesses, including finance sector organisations, are not direct subjects of the international human rights treaties, which assign duties to governments. However, a consensus was emerging that within their 'sphere of influence' businesses have a role to play in relation to human rights laws and principles.

In 2005, Professor John Ruggie was appointed as the United Nations Secretary-General's Special Representative on the issue of 'human rights and transnational corporations and other business enterprises'. His mandate included identifying and clarifying standards of responsibility and accountability for businesses with regard to human rights.

In 2008, Ruggie put forward a Framework on Business and Human Rights. This rests on three pillars:

  • the state duty to protect against human rights abuses by third parties, including business
  • the corporate responsibility to respect human rights
  • greater access by victims to effective remedy, both judicial and non-judicial

Following further extensive consultation with the business community, NGOs, academics and others, Ruggie issued the "Guiding Principles on Business and Human Rights: Implementing the United Nations 'Protect, Respect and Remedy' Framework". The Guiding Principles were unanimously endorsed by the UN Human Rights Council in 2011.

The Protect, Respect and Remedy Framework

Protect: The Framework sets out five ways in which states can work to promote and protect corporate respect for human rights and prevent corporate abuses of human rights:

  1. greater policy coherence and effectiveness across departments working with business
  2. promoting respect for human rights when states do business with business
  3. fostering corporate cultures respectful of human rights
  4. devising innovative policies to guide companies operating in conflict-affected areas
  5. examining the cross cutting issue of extraterritoriality.

Respect: Corporate responsibility to respect human rights means acting with due diligence to avoid infringing the rights of others and addressing harms that do occur. A company's responsibility to respect applies across all its business activities and relationships.

It is clear that there are few if any internationally recognised human rights that a business cannot impact, or be perceived to impact in some manner, so companies should consider all such rights.

Remedy: The Framework indicates that states have to ensure that when human rights abuses occur, those affected have access to effective remedy through judicial, administrative, legislative or other appropriate means.

People who believe that their human rights have been abused should be able to bring this to the attention of their government or the company involved and seek remediation. The Framework does not suggest that a business which is indirectly linked to abuses through a business relationship is required to provide for remediation, either financially or otherwise, though it may take a role in doing so.

Guiding Principles on Business and Human Rights

The Guiding Principles set out 31 principles, with a commentary on each, to assist states and companies to implement the Protect, Respect and Remedy Framework. Fourteen principles directly address the business community. These principles rest on two core elements:

A policy commitment to respect human rights, approved by senior management, which covers all business operations. A human rights due diligence process to identify, prevent, mitigate and account for how business address their adverse human rights impacts.

Due diligence

The Guiding Principles suggest a five stage approach to due diligence:

  1. identify and assess actual and potential human rights impacts
  2. consult with affected groups and relevant stakeholders
  3. integrate the impact assessment findings across relevant internal functions and processes
  4. prevent or mitigate potential adverse impacts and take part in remediation if violations have already occurred
  5. track responses and communicate how impacts are identified and addressed.

This approach is explored fully in the section: Risk Management.

Implementing the Guiding Principles

In 2011, Ministers from the Organisation for Economic Co-operation and Development (OECD) countries adopted updated Guidelines for Multinational Enterprises. These include recommendations addressing human rights which draw upon the Protect, Respect, Remedy Framework and Guiding Principles. There is a link to the OECD Guidelines in Resources.

The European Union endorsed the UN Guiding Principles in 2011 and a number of member states have produced national action plans.

These two examples demonstrate that the Guiding Principles influence the policies and expectations of international organisations and national governments and will therefore become increasingly significant to businesses in all sectors.

There is a link in Resources, under the heading 'Human Rights and Business' to a wide range of documents relating to the Protect, Respect, Remedy Framework.


December 2014     United Nations Environment Programme Finance Initiative