Health and life sciences

FIs should develop specific policies and procedures to address the most salient human rights risks in relation to Health and life sciences. Health and life sciences policies and procedures should include a recognition of the corporate responsibility to respect human rights as set out in the UNGPs, including implementing human rights due diligence which reflects sector-specific risks. It should also include a commitment to human rights standards based on the International Bill of Human Rights and the ILO Fundamental Conventions.

Policies and procedures can also include a commitment to key sector-specific standards, as well as to standards which address the most salient human rights issues in the sector. For the Health and life science sector, this may include standards on medical ethics – such as the WMA Declaration of Helsinki – as well as the Oviedo Convention Human Rights and Biomedicine, the UN Convention on the Rights of Persons with Disabilities, and the Universal Declaration on Bioethics and Human Rights. Relevant guidelines include the CIOMS International Ethical Guidelines for Health-Related Research Involving Humans, the WHO Human Rights Guidelines for Pharmaceutical Companies in Relation to Access to Healthcare and the UN Human Rights, Human Rights Guidelines for Pharmaceutical Companies in relation to Access to Medicines.

Any commitments by FIs to these standards, or any concrete expectations for clients/investee based on these standards, should be accompanied by an explanation of how the human rights-related expectations embedded in these standards will be implemented.

FIs’ Health and life sciences policies should set clear expectations and requirements of how to address human rights risks by the portfolio clients and throughout the value chain This can include setting out minimum human rights criteria for the provision of financial services, such as:

• Requiring that clients / investees have identified their key human rights risks and have a policy in place specifying how it will address these risks associated with their processes and products, in line with the UNGPs.
• Integration of human rights considerations into all relevant environmental and social documents. For example, this should consider how hazardous air emissions, greenhouse gas and odour emissions, hazardous materials and waste management, and the possibility of land, water or air contamination may impact on local communities’ right to a healthy environment.
• Requesting specific documents to address specific human rights risks on issues such as: right to autonomy and informed consent in relation to medical treatments, clinical trials, and research involving human subjects, access to medicine and healthcare.

For further information, see ‘Taking Action – Strengthen human rights in FI policies’.

See also ‘Policy commitments and human rights’ for practical guidance on how to develop policy commitments which are consistent with the UNGPs, and how to integrate relevant human rights commitments in other policies and procedures.

Human rights screening and risk assessment should include key entities in the value chain, for example clients’ contractors and sub-contractors, suppliers and sub-suppliers. FIs should screen their Health and life sciences portfolio to map and identity salient human rights risks, whether their clients’ activities in the sector are likely to impact on vulnerable groups (workers, communities and consumers), and to evaluate the systems that their clients have in place to mitigate and prevent both risks and impacts.

FIs can seek to ensure that screening and risk assessments reflect key contextual risk factors in the health and life sciences:

• Operational and geographical context: production facilities in emerging markets where regulations – notably around workplace health and safety – may not be not properly enforced; healthcare provision in contexts where there is inequitable or inadequate access to basic healthcare or essential medicines; economic / political instability and crises which disrupt healthcare systems, leading to shortages of essential medicines and equipment.
• Type of business relationship: this can include risks associated with significant contractor/sub-contractor workforce, use of labour intermediaries.
• Client / investee-specific risk factors: identify if the client / investee has any documented track record of causing, contributing to or being linked with human rights harms; clients or investees using and/or producing hazardous substances and/or hazardous waste.
• Presence of vulnerable groups: this may include migrants (for example, migrant workers in health and care settings); children and young people; groups such as refugees and rural communities which face barriers in accessing healthcare facilities and services.

See ‘Taking Action – Strengthen FI risk management systems and processes’. See also ‘Human Rights Screening and Risk Assessment’ for practical guidance on developing risk screening and assessment systems and processes.

Throughout the financial cycle, FIs should gather information on how clients / investees are managing specific human rights risks and impacts relevant to Health and life sciences.  This could include requiring clients / investees to provide information on:

• Human rights claims or complaints, along with the measures adopted to address them, including any consumer safety incidents or data protection breaches.
• Labour and occupational safety and health incidents and/or worker complaints, as well as the mitigation/ prevention measures taken. This should extend to contractors’ and sub-contractors’ workforces.
• Management of any claims and protests from civil society organisations/health care users, for example relating to access to medicine/health care system.
• Environmental management systems: the company’s environmental management systems and certifications, including approach to managing hazardous and biological waste.
• Water use and pollution: the company’s approach to water management and pollution prevention, particularly in relation to the use of water in water-stressed areas.
• List of suppliers: a complete list of suppliers, where possible including their locations, types of products provided, and the volume of business conducted with them.
• Supplier assessments: the company’s approach to assessing and monitoring suppliers’ compliance with human rights standards, including any measures implemented.
• Consultation: approach to consultation with potentially affected groups and other relevant stakeholders, including processes, participants, findings and outcomes.

FIs can also engage directly with health and life sciences clients / investees and use or build leverage to require, facilitate, and incentivize respect for human rights throughout the financing cycle. Effective client / investee engagement helps to build a common understanding of risks, gaps, and required actions. This ensures that measures can be adequately appropriated and implemented. This might include a focus on the following areas:

• Promoting client / investee HRDD along the value chain: Health and life sciences can have diverse inputs and operate within long and highly complex upstream value chains comprising thousands of suppliers around the world. Upstream value chains may represent high risks, particularly in contexts where regulations are not properly enforced.
• Increasing client / investee value chain visibility and transparency: FIs encourage companies to create a comprehensive mapping of their value chains. By mapping their value chains, businesses are able to begin to understand the possible human rights-related risks to which they are exposed, based on the countries where different products and commodities are sourced and brought to market. Having visibility over the length and complexity of the value chain will also help clients / investees prioritise the actions needed to help identify, prevent and mitigate human rights risks.
• Requiring clients to identify their key human rights impacts and risks and have a policy in place specifying how human rights risks associated with their processes and products are addressed, in accordance with the UN Guiding Principles. For higher risk investments (for example relating to research and development), clients can be asked to undertake human rights impact assessments that help to identify and address potential risks.

See also ‘Taking Action – Client / Investee Engagement’.

Contractual requirements are also a common tool to build leverage, and FIs should consider integrating human rights considerations into financing contracts with clients, based on organisational human rights policies and commitments.

Examples of relevant contractual provisions may include:

• Requiring client / investee to provide evidence of all requisite permits and licences, and ensure continuous compliance with them.
• Requiring clients / investees to have robust risk management plans (including parameters around safe use and disposal of hazardous materials), a health and safety plan and an emergency preparedness/accident response plan in place, to ensure the safety of workers and communities in the event of a major incident.
• Requiring clients / investees to have robust policies and procedures in relation to data protection of patient / service user health records. Data protection standards should be at least in line with national legal requirements, to safeguard patient information and ensure that all collected data is protected through regular security upgrades and adequate employee training.

Pending financing modality, FIs can seek to use contractual leverage with clients to encourage the ‘cascading’ of human rights-respecting business practice along the value chain. This may commence with the requirement that the client / investee develops and implements a supplier of code conduct aligned with the international standards which responds to all identified human rights risks for a defined scope of the value chain. Where appropriate, specific risk mitigants and process requirements – including monitoring, reporting and stakeholder engagement – can be elaborated in the action plan and covenanted in contractual agreements.

This includes due diligence of business partners’ processes for data protection – notably for clinical research organisations – and continuous monitoring of potential threats. Healthcare companies should implement robust protocols to ensure that patient data remain confidential and that patients have access to their data upon request.

See also ‘Taking Action – Contractual provisions’.

Where risk assessments have identified potential human rights impacts, action needs to be taken. The type of action will depend on the severity and likelihood of the impact/s, as well as on how the FI is involved with the human rights impact/s.  In some financing contexts, such as project finance, environmental and social action plans (ESAPs) are an important and common tool for developing specific mitigants and responses in view of risks. In other cases, particularly where greater risks are identified, specific additional plans might be required.

FIs working with clients / investees in health and life sciences can focus efforts in all the following areas:

• Safe and healthy working environment. Adopt and implement specific procedures to identify and address key safety and health issues specific to the workplace.
• Human resources: Adopt and implement explicit human resources policies and procedures that prevent discriminatory practices, respect fundamental rights at work based on freedom of association, promote responsible recruitment practices.
• Product use: Adopt and implement commitments to prevent and mitigate and remediate adverse impacts of product use. Possible health risks should be clearly displayed on the product, labelling and advertisement. Companies should provide detailed information about correct product use (including risks) and take reasonable steps to ensure that products are not made available to those likely to misuse them. Companies should establish systems to ensure traceability of products and awareness of customers and their product needs, as well as an emergency response plan.
• Resource management: Further policies and procedures should be implemented by clients to conserve finite resources (including water, energy and land), taking into account local communities’ needs for these resources now and in the future.
• Safe drug trials: Any testing and trials must be conducted with the highest standard for the privacy, health and safety of fully consenting participants. FIs should ensure that clients / investees take into account motivation for trial participants (particularly in poor or vulnerable communities) and provide clear information about potential side effects of trials. To achieve this, set clear expectations that clients must consider stakeholder engagement, communication about health risks, and company processes to track the well-being of participants. Clinical trials should aim to be diverse, representative and accessible, reflecting patient populations. Equally, trials should not disproportionately target low income or vulnerable groups.
• Ethical marketing practices: In order to prevent and mitigate adverse impacts of product use, require that information about correct use (including risks) is clearly displayed on the product, labelling and advertisement. It’s important that clients take reasonable steps to ensure that products are not made available to those likely to misuse them – and that this information is recorded and can be demonstrated to FIs. They should establish systems to ensure traceability of products and awareness of customers and their product needs, as well as an emergency response plan in the event of product recall on health and safety grounds.
• Working with third parties: Health and life sciences clients can ensure that they work with responsible third-party companies. FIs can require that clients establish and communicate a code of conduct and a service provider screening policy, requiring good practice in line with established health and safety, labour rights and human rights standards. It is a client’s responsibility to make sure that service providers are aware of potential hazards and have systems in place to protect workers.

For more general information, see ‘Taking Action – Action Plans and Specific Mitigations’.

In relation to health and life sciences this could include for example refraining from providing financing to projects which have the potential to negatively impact on the accessibility and affordability of essential medicines and healthcare services. See ‘Taking Action – Avoid actions and omissions that facilitate or incentivise human rights abuses’.

FIs should work collaboratively with stakeholders to inform their policies, identify risks, improve monitoring systems and grievance mechanisms, as well as to address entrenched human rights challenges in health and life sciences. This should involve meaningful consultation with potentially affected groups and other relevant stakeholders, as appropriate to the nature and context of the operation. The relevant stakeholders for FIs financing health and life sciences would include: other banks and investors with similar portfolios, industry associations and groups representing healthcare practitioners, regulators (such as Ministries of Health), multilateral organisations, NGOs or consumer groups working on human rights issues linked to the sector, trade unions, academics, and rightsholders affected or potentially affected by client / investee activities, including patients and service users and their legitimate representatives. In particular, FIs can engage with credible multi-stakeholder initiatives that promote human rights principles and standards in health and life sciences.

FIs should ensure that clients / investees in the health sector engage with patients and service users. Patient-centred care requires collaboration and shared decision making between patients, families and care providers. Focusing on patients as rightsholders and engaging them as much as possible offers many opportunities for securing their rights and can be empowering to individuals.

FIs can also encourage clients / investees in the sector to partner with other actors (e.g. government agencies, impact investing funds, foundations) to develop innovative business and revenue models to improve access to healthcare. At the distribution stage, they may engage with host governments or other agencies to facilitate low-cost access to needed medical products. Clients may also help prevent counterfeiting by implementing mass serialization, engaging with healthcare practitioners to raise awareness of risks and detect counterfeit products, and through collaborative efforts involving other private actors and government ministries of health.

See ‘Taking Action – Stakeholder engagement and collaboration’. See also ‘Stakeholder engagement’ for guidance on collaborating, engaging and pursuing collective action.

FIs can enhance transparency and disclosure practices by providing stakeholders with access to sufficient, relevant and frequent information about finance and investments in the health and life sciences sector, including potential human rights impacts, mitigation measures, and grievance mechanisms. FIs can also develop and publish reports against clear indicators reflecting a human rights perspective, including salient issues, measures, and results. For example, improved reporting on ‘Access to Medicine’ is increasingly recognised by stakeholders in the healthcare ecosystem as a key lever for addressing the health challenges globally. FIs could support this by providing information about how their finance and investments in the sector have performed in relation to key indicators.

FIs should encourage health and life sciences companies to disclose activities relevant to access to medicine and basic healthcare. Specific areas for consideration may include disclosing advocacy and lobbying activities, and measures in place to increase access to medicine for vulnerable populations (e.g. differential pricing and voluntary licencing).

See also ‘Taking Action – Transparency and disclosure’.

FIs can provide training and capacity building for FI staff, particularly those involved in risk assessments and financial decision-makers, on key human rights issues and the specific risks associated with health and life sciences. FIs should also ensure that clients / investees have sufficient technical, financial and logistical resources available, including an interdisciplinary team that includes qualified with human rights expertise and knowledge on the industry context. For example, this could consider how research and development activities affect access to medicines.

See also ‘Taking Action – Capacity building and training’.

FIs can work with clients / investees to establish robust monitoring and evaluation mechanisms to track the effectiveness of measures taken to prevent and mitigate human rights abuses at the portfolio level. This should focus on mechanisms which allow for continuous feedback and improvement, ensuring that the FI’s human rights practices evolve based on sector- and region-specific lessons learned and emerging best practices. The complaints received through the grievance mechanism should also be used as input to evaluate the effectiveness of the measures implemented.

At the operational level, FIs can support clients / investees to adopt monitoring mechanisms that are appropriate to the level of risk, and led by teams with relevant skills and expertise. In relation to Health and life sciences FIs can focus on:

• Human rights impacts associated with research and development activities, and ensuring that there is adequate monitoring systems in place for evaluating client activities, third-party suppliers and consumer education on responsible disposal of unused medicines.
• Any data collection for monitoring and evaluation purposes should be accompanied by clear measures to protect patient / consumer data. Data protection standards should be at least in line with national legal requirements, to safeguard patient information and ensure that all collected data is protected through regular security upgrades and adequate employee training.

FIs should also ensure that clients / investees have appropriate procedures in place to cascade monitoring through the value chain. Such measures include, improved grievance mechanisms, dialogue with worker committees / unions, KPIs to track potential negative impacts.

See ‘Taking Action – Monitoring and evaluation’ for practical guidance on monitoring and evaluation processes to track human rights risks and impacts associated with business activities

FIs should ensure that accessible and effective grievance mechanisms are in place to enable affected stakeholders to raise concerns and seek redress for any alleged human rights abuses related to their investment or lending activities in Health and life sciences transactions and investments. This includes requiring clients / investees to have in place or to participate in a grievance mechanism aligned with Principle 31 of the UNGPs. 

FIs can set up their own grievance mechanisms, participate in one or more grievance mechanisms established together with other FIs, or participate systematically in clients’ / investees’ grievance mechanisms. In relation to workers, note that grievance mechanisms established by existing industrial relations systems and collective bargaining agreements can constitute effective and credible mechanisms to respect labour rights. It is vital that all potentially affected rightsholders have access to a safe and effective grievance mechanism, and broader mechanisms to provide input into the organisation, governance, and accountability of health systems. It is important that patients and users are given clear information on how to access mechanisms and raise complaints. Clients / investees should demonstrate how they communicate availability of mechanisms and how they train front line staff to both raise awareness of mechanisms and how to respond to complaints.

In relation to value chains associated with Health and life sciences, FIs should ensure that clients / investees map potentially affected groups, including those most vulnerable (whether it be staff, trial participants, consumers, community members), and demonstrate how they have effective grievance mechanisms to address any potential negative impacts (in line with UNGP effectiveness criteria).

Downstream companies are well-placed to support suppliers’ in establishing robust grievance management systems, thereby enhancing the detection, resolution, and prevention of adverse human rights impacts. FIs can work with downstream investees / clients to develop a policy on how they expect suppliers to handle human rights grievances, and the actions that investee / client will take if the supplier fails to take appropriate action.

See ‘Taking Action – Improve and support the effectiveness of grievance mechanisms to ensure and enable remedy’.