Once human rights impacts and risks are identified, an FI should take action. Where it is necessary to prioritise actions to address actual and potential adverse human rights impacts, FIs should first seek to prevent and mitigate those that are most severe or where delayed response would make them irremediable. Identifying these salient human rights issues is meaningful within the framework of the UNGPs as long as it leads to concrete actions to address them.

The type of action will depend on how the FI is involved with the human rights impacts – namely, through a) causing adverse impacts, b) contributing to adverse impacts caused with or through another entity; or c) being directly linked to adverse impacts through business relationships. The appropriate action will vary according to the extent of an FIs leverage in addressing the adverse impact. The concepts of cause, contribute, or directly link are also discussed in greater detail in the section on ‘Remedy‘.

For all identified risks, the following considerations can serve as a guide for identifying and developing appropriate measures:

Question Indicative examples

Are risks adequately addressed by policies, processes, and systems? If not, do policies and systems need to updated or developed? (See also section on ‘Policy commitments and human rights‘)

This can involve considering the existence (or development) of the following policies or frameworks:

  • Human resources policies and procedures, e.g. on workplace sexual harassment, health and safety
  • Codes of conduct, protocols and training for staff engaging with individual retail customers, including non-discrimination (equal treatment and avoiding bias), privacy and data protection (confidentiality, informed consent), fair treatment (transparent terms, ethical marketing, support for vulnerable customers, right to redress) and financial inclusion (responsible lending)
  • Privacy, data protection, and information security frameworks
  • Procurement and supplier management systems, including supplier codes of conduct and systems to assess prospective suppliers’ commitment to human rights and monitor their performance
  • Contractor management systems, including contractor codes of conduct and systems to vet and monitor contractors
  • AML, KYC, and other risk management frameworks
  • Non-discrimination policies or procedures in the context of own human resources or retail lending

Have relevant stakeholders been engaged – in terms of both developing policies / mitigants and raising awareness of human rights risks? (See also section on ‘Policy commitments and human rights‘)

Engagement may entail both internal or external stakeholders:

  • Internal: engaging key functional areas to raise awareness and ensure that policies and systems adequately respond to human rights risks, including HR, sustainability, procurement, risk, and legal / compliance
  • External: engaging with external stakeholders such as customers, civil society organisations, community groups, or independent experts may be desirable in order to validate approaches or seek impartial feedback

Have monitoring or reporting frameworks been developed which can provide a basis for understanding the effectiveness of mitigation measures? (See also section on ‘Monitoring‘)

Monitoring or reporting approaches might entail:

  • Receiving regular reports on the manner in which third parties comply with applicable human rights standards (e.g. supplier questionnaires or reports from contractors)
  • Audits or site visits
  • Developing and tracking relevant KPIs, e.g. in relation to grievances, training hours, supplier or contractor screening / onboarding metrics
  • Qualitative surveys, e.g. staff engagement or customer surveys

Have measures been taken to promote a culture of human rights respect in the business enterprise?

Measures are potentially varied, but can include:

  • Providing staff with specific training on avoiding discriminatory bias in customer service or on equal treatment and non-discrimination in the context of access to loans, confidentiality and informed consent in the context of data protection, fair treatment, particularly for vulnerable customers, and responsible lending in the context of financial inclusion.
  • Improving physical and digital accessibility for people with disabilities or older people

Promoting internal awareness of human rights commitments and risks is crucial to ensuring uptake and implementation. Engagement efforts can focus on the bank’s own human resources and client facing employees, including through training and knowledge sessions. Outreach to third parties (e.g. contractors, suppliers, commercial partners, civil society organisations) may also be necessary to ensure that human rights expectations are fully understood and implemented.

Audience Opportunities for engagement and awareness raising

Own workforce / human resources
  • Staff training or awareness raising to support improved compliance with human rights related policies and processes (e.g. in relation to sexual harassment and discrimination)
  • Staff training or awareness raising in relation to key customer service policies, including in relation to data protection, privacy, non-discrimination
  • Integration of human rights considerations into staff evaluation or performance management frameworks (e.g. incentives related to diversity and inclusion, or effective dispute resolution and grievance management)

Consumer banking customers
  • Education or materials (e.g. brochures or web pages) on customers’ rights, including in relation to data privacy, non-discrimination, access to services, complaints
  • Awareness raising on key compliance obligations in relation to anti-money laundering and relevant national human rights requirements

Contracted workforce

Service providers

Goods / materials supply chain

Commercial partners
  • Communicating FI requirements (e.g. Responsible Sourcing policy) at the outset of (potential) procurement
  • Supporting suppliers or contractors to meet human rights related compliance obligations, e.g. through training or provision of guidance
  • Incentives based on demonstration of compliance (e.g. early payment, financial awards, procurement selection advantages)
  • Audits, site visits, or bilateral engagements aimed at discussing compliance challenges and potential resolutions

 

Case study: training and engagement approaches

Banks consistently identify training as a key tool for promoting internal knowledge and awareness of human rights obligations. Approaches differ, but banks such as UniCredit take a common ‘group level’ approach to human rights training which is delivered at multiple levels, including induction and manager training. External experts may also be called upon to provide specific human rights insights or expertise.

 

Further reading

Where possible, an FI’s human rights policies and commitments should be supported by binding legal requirements. The nature of contractual requirements will differ based on the relationship in question, but can include:

Audience Examples of contractual commitments

Own workforce / human resources

Policies and codes of conduct can establish enforceable (e.g. through disciplinary procedures) and transparent expectations in relation to human rights, workplace conduct, and treatment of customers (e.g. sexual harassment, non-discrimination, privacy and data protection).

Contracted workforce

Service providers

Goods / materials supply chain

Commercial partners

Contracts with third party contractors, suppliers, and partners can integrate clear and enforceable human rights standards, including monitoring and reporting requirements (see also section on ‘Monitoring‘). This is particularly relevant where third-party staff are likely to encounter high-risk scenarios (such as third-party security providers in bank locations) or likely to engage vulnerable workers (such as in ancillary services such as cleaning or catering).

These standards are frequently linked to policy commitments, such as procurement codes, supplier codes of conduct, or contractor management policies.
Case study: integrating human rights considerations into procurement contracting

Triodos Bank outlines key aspects of its sustainable procurement policy which applies to all suppliers and requires them to apply the same human rights principles as the Bank itself. To support suppliers in meeting these requirements, the Bank engages in dialogue with key suppliers and provides guidance / feedback on social performance issues.

 

Barclays’ standard Third Party Service Provider (TPSP) terms include an obligation on the TPSPs to respect internationally recognised human rights. The terms also require Barclays’ TPSPs to use reasonable efforts to procure the same of their affiliates and subcontractors. Barclays’ Third Party Code of Conduct (TPSP CoC) identifies the bank’s expectations regarding respecting human rights. During the annual self-attestation process TPSPs are asked questions related to these TPSP CoC topics. Those whose responses do not meet our expectations are escalated to risk owners for appropriate action and remediation.
Further reading