A financial institution can consider its human rights impacts in relation to human resources, procurement, facilities / property management, and consumer lending in the same way as any non-financial sector businesses.

Overall, risk assessment should be viewed as a continuous rather than a one-off process. Key steps include:

Identifying actual and potential adverse impact

For most FIs, this will involve:

  • Mapping and understanding the entirety of an FI’s activities and operations and functions, including as an employer, procurer of services and goods, and provider of consumer banking services
  • Identifying the full range of human rights that could potentially be negatively impacted by these activities
  • Identifying other actors or entities involved in the value chain, as well as the stakeholders who are or could be affected by the FI’s decisions or operations
  • Identifying groups that might experience different or disproportionate impacts stemming from the FI’s operations due to their marginalised and / or vulnerable situation.

Examples of relevant rights and impacts across typical FI operations (specifically own business operations and consumer banking) are explored below.

Determining saliency

Once risks have been identified, ‘salient’ risks should be prioritised for action. Saliency is typically assessed based on two factors:

  • Scale (i.e. the gravity of an impact), scope (i.e. the number of individuals impacted), irremediability (i.e. the ease at which the impacts can be remediated)
  • Likelihood, namely the impacts that have a higher chance of occurring

Consultation

Consultation should involve meaningfully engaging with potentially affected groups and other relevant stakeholders. This can be a helpful process for testing and validating risk and saliency assessments. For more information, see section on ‘Stakeholder engagement‘.

 

 

Area Examples of relevant rights Indicative examples of impacts

Human resources, own employees and non-employee workers
  • Labour related rights (e.g. working conditions, freedom of association and collective bargaining, employment discrimination, gender-based violence and harassment)
  • Right to privacy
  • Right to an effective remedy

Female staff members raise allegations of sexual harassment against a supervisor following a company sponsored event

Contract cleaners working night shifts are not compensated for overtime pay by their employer

Procurement, commercial partners
  • Labour related rights (e.g. conditions of workers engaged by suppliers or commercial partners)
  • Right to a healthy environment
  • Right to privacy
  • Right to an effective remedy

Supplier of office equipment accused of improper e-waste disposal, causing ground water contamination and negative health impacts in broader community

Audit of promotional products supplier (pens, stationary, water bottles) reveals that employer makes illegal wage deductions which impact the livelihoods of workers

Consumer banking / personal lending, customers and the community
  • Right to privacy (data protection)
  • Rights of non-discrimination
  • Right to an effective remedy
  • Right to information (adequate, reliable, and sufficient information)

Employee gains unauthorised access to customer data and transaction records

Branch security mistakenly ejects visitor on the basis that he appears homeless, and justifies the decision on race-based grounds

Systemic failure to investigate suspicious transactions which have indicators of human trafficking

 

Case studies and further reading

Human rights saliency assessments

NatWest Group have identified six salient human rights issues framed around five roles: Employer, Procurer, Retail Banker, Investor and Commercial Banker. As an employer, the Bank has identified a number of key risks including: data protection and privacy; labour rights and working conditions; and discrimination and lack of support for the vulnerable.

As part of its Human Rights Report, ING has identified salient risks across key operational areas:

  • As an employer: work-related stress; discrimination; harassment
  • As a procurer of goods and services: occupational health and safety; modern slavery and forced labour
  • As a corporate lender: child labour; forced labour; land and resource related community issues
  • As a provider of banking services to individuals: discrimination and lack of access to finance; financial distress; privacy breaches.

In its group human rights statement, Barclays lays out its commitment to respecting human rights as it relates to a range of key stakeholders, including the bank’s role as an employer, provider of consumer banking services, and procurer of products and services.

 

Further reading