Clear commitments to respect human rights provide the basis for an FI’s human rights approach.

These commitments can be standalone policies, or embedded in other policy documents, and their content can depend on a range of factors including an organisation’s size / capacity, operations, investment context, and regulatory context. For example, there are banks that include human rights commitments in their Social and Environmental Framework Policy.

Consistent with the UNGPs, an FI’s human rights policy commitments should typically integrate the following considerations:

Considerations Description Questions to consider

Clear scope of application, including personnel, business partners and products or services – extending to the bank’s client and investee relationships

Commitments should have a clear scope of application, and consider the potential human rights impacts of the bank’s operations (e.g. own workforce management, procurement of goods and services by the FI), consumer banking and all financing related operations.

The policy should also specify the individuals or groups who are subject to the policy (workforce, suppliers, customers, clients, investee companies, business partners, rating agencies, ESG data providers, civil organizations, community, etc).
  • Which individuals or groups will the policy apply to (e.g., employees, retail customers, suppliers, clients / investees, affected communities)?
  • How will the policy apply to the bank’s different roles – as an employer, as a provider of financial services to individuals, as a purchaser of goods and services, as a lender / investor?
  • How will the bank ensure that all relevant employees understand the importance of the human rights policy and their role in its implementation?
  • What training and capacity-building programs will be provided to staff, management and partners across the value chain?

Clear policy expectations and commitments

Human rights expectations may draw from a range of internationally recognised principles and instruments, such as:

  • The UN Guiding Principles on Business and Human Rights (UNGPs)
  • The International Bill of Human Rights
  • The International Labour Organization’s (ILO) Fundamental Principles and Rights at Work (and associated conventions)
  • The OECD Guidelines for Multinational Enterprises
  • Applicable laws or regulations (e.g. in relation to human rights due diligence or transparency).
  • Which internationally accepted definition of human rights will the bank use in its policy? What are the instruments supporting it?
  • How does the bank incorporate core values and principles regarding human rights into its policies?
  • Which international human rights frameworks and standards will the policy align with?
  • What are the legal and regulatory requirements related to human rights in the bank’s operating jurisdictions?
  • How will the bank ensure that its human rights policy complies with these regulatory requirements while also aligning with international standards?
  • How will the bank ensure that human rights are respected in its business relationships, including throughout its value chain?
  • How will it be ensured that clients effectively assess human rights risks in their value chain and leverage their influence to address these risks with their suppliers and customer?
  • How will the bank carry out its human rights due diligence?
  • How will the bank ensure that their clients provide access to remedy in case of negative impacts? What type of grievance mechanisms are expected to be in place?
  •  How will the bank promote respect for human rights with its clients?

Consistent with the UNGPs, an FI’s human rights policy commitments should typically integrate the following considerations:

The policy should be Description Questions to consider

Approved by senior management

This entails approval at the board or CEO level, or other equivalent decision-making structure.
  • Is it approved at the most senior level?
  • Who within the bank will be responsible for overseeing the implementation of the human rights policy?
  • What governance structures exist or will be established to ensure accountability and oversight?
  • What mechanisms will be used to integrate human rights considerations into the bank’s decision-making processes?

Informed by relevant expertise

Engaging internal teams across different functional areas within a business can be a valuable source of information when defining policy commitments (e.g. risk, legal, procurement).

Internal teams may have knowledge ofrelevant risks (see also section on ‘Risk assessment’ for both financing and own operations), policy gaps, and existing commitments.

Engaging external stakeholders can provide valuable insights and guidance, including identifying previously unseen risks or validating internal findings.
  • What internal expertise (ESG, legal, compliance, human resources, risk management, human rights) is available within the bank to contribute to the development of the human rights policy?
  • How will the bank involve employees across different departments and levels in the development of the policy?
  • What methods (such as surveys, focus groups, workshops) will be used to gather input from internal stakeholders?
  • How will the bank ensure that the perspectives of client-facing employees, who may be more directly affected by human rights issues, are considered?
  • Which external experts (human rights consultants, academics, non-governmental organisations) can provide valuable insights and guidance?
  • How will the bank identify and select external experts with relevant experience and credibility?
  • What process will be used to engage with these external experts (such as advisory panels, consultations, partnerships)?
  • How will the bank benchmark its human rights policy against FI best practices?
  • How will the bank document the process of developing the human rights policy, including the input received from internal and external experts?
  • What process will be established for regularly reviewing and updating the policy based on ongoing input from internal and external experts?

Informed by affected or potentially affected stakeholders

When establishing policy commitments, proactive consultations can serve as a source of valuable insights, allowing for greater incorporation of stakeholder knowledge and subject-matter expertise.

Stakeholders can, for example, help identify place-based human rights risks and provide advice on enhancing an organisation’s risk management strategies (see also section on ‘Stakeholder engagement’ for financing operations).
  • How will the bank engage with stakeholders (e.g., employees, customers, NGOs, local communities) in the development and implementation of the policy?
  • What communication channels, platforms or fora can be used to facilitate meaningful dialogue with these stakeholders on human rights issues?
  • How will the bank gather information on the human rights landscape in the sectors and regions where it operates? Which stakeholders can provide insights into specific human rights challenges and opportunities in these areas?
  • What procedures will be in place for stakeholders to raise concerns or grievances related to human rights?
  • How will the bank incorporate feedback from stakeholders and lessons learned into the policy?

Publicly available and communicated internally and externally to all personnel and relevant external parties

To promote transparency and accountability, policies should be made publicly available to both internal and external audiences. This may include publishing commitments on websites and internal intranet sites.

Awareness raising can target relevant stakeholders (both internal and external) to ensure knowledge and understanding of pertinent policy commitments.
  • How will the FI communicate and report on its human rights performance, both internally and externally?
  • What channels can an FI use to effectively communicate the policy? Can the effectiveness of these communication channels be measured?
  • Who are the relevant internal and external stakeholders or audiences?
  • How can it be ensured that communications are relevant and accessible to the target audience?

Reflected in operational policies and procedures, as well as governance arrangements

Policy commitments may touch upon other policy areas, such as human resources, procurement, or investment policies. This may require a review or update of relevant policies or procedures.

Additionally, it should be ensured that:

  • Specific individuals, teams, or roles are accountable for policy oversight and implementation.
  • The frequency of policy updates is specified
  • Provision is made for tracking and monitoring implementation.
  • Which individuals, teams, or roles are accountable for policy oversight and implementation?
  • How frequently should the policy be revised and updated?
  • What processes will be in place to ensure continuous improvement of the policy and its implementation?
  • How will the bank monitor the implementation of its human rights policy?
  • What key performance indicators (KPIs) will be used to measure the policy’s effectiveness?
  • How can it be ensured that other policies within the business (whether new or revised) are coherent with human rights policy commitments?

Relevant human rights commitments need to be reflected in other policies and procedures, including those pertaining to human resources, contractor management, procurement, consumer banking, as well as lending and investment policies. Examples of relevant human rights considerations are included below.

Area Typical functional area(s) Examples of relevant policies and procedures Key human rights considerations

Own workforce

Human resources (HR)
  • HR policies and procedures
  • Staff regulations
  • Employee handbook

Policies and procedures should:

  • Be applicable to all employees including permanent, part-time, fixed term, and casual
  • Reflect key labour-related international human rights principles and standards (see also section on ‘Introduction to human rights’ on the landing page)
  • Include workers access to effective grievance mechanisms, (see also section on ‘Grievance mechanisms’)
  • Specify that HR is adequately staffed and trained in human rights related matters

Contracted workers

Procurement of services, human resources, or “user” departments / functional areas
  • Contractor management policy
  • Procurement policies and procedures
  • HR policies and procedures

Policies or procedures should:

  • Be applicable to workers engaged by third parties and outsourced services such as janitorial, maintenance, security or other functions
  • Set clear standards as to how third party contractors should manage the workforce, such as minimum compliance with national law as well as internationally recognised principles or standards
  • Describe the process of procurement / selection of contractors, contractual requirements, and auditing or monitoring of contractors
  • Specify how third party contractors will have access to grievance management systems

Supply chain

Procurement of goods
  • Procurement policies and procedures
  • Supply chain code of conduct

Policies or procedures should:

  • Be applicable to suppliers and their workforce
  • Set clear standards as to how suppliers should manage the workforce and communities, such as compliance with national law, internationally recognised principles or standards (or third party supply chain standards (e.g. ETI’s Base Code)
  • Describe the process procurement / selection of suppliers, contractual requirements, and third-party auditing or monitoring
  • Specify that third party suppliers will implement workforce grievance management systems

Consumer banking

Money laundering, financial crime, trafficking, KYC, information technology (IT) team, compliance, facilities management
  • Anti-Money Laundering policies
  • Financial crime policies
  • Risk policies
  • Bank code of conduct
  • Customer service / customer rights policies
  • Customer grievance and redressal policies
  • Privacy policies or statements
  • Diversity and inclusion policies

Policies or procedures should:

  • Have a clear scope of application, e.g. to all customers, and business relationships
  • Reference applicable laws and good international practice
  • Set clear standards in relation to topics including anti-money laundering, trafficking, anti-discrimination in relation to financing / credit decisions, consumer protection, customer privacy / use of data, and customer accessibility (including both online and physical accessibility, as relevant)

Lending and investment activities

Investment, risk, sustainability, ESG

Money laundering, financial crime, trafficking, KYC, compliance
  • Responsible lending or investment policies
  • Financing procedures
  • Sustainability policy
  • Environmental and social management systems
  • Standard operating procedures
  • Exclusion lists

This should include clear standards on how to Integrate human rights considerations at every step of the process, including:

  • Risk assessment (screening and due diligence)
  • Development of mitigation measures and action plans
  • Contracting, development of loan covenants, investment memos and other financing documentation
  • Monitoring and reporting
  • Grievance and remedy
  • Responsible exit

 

Specific guidance for each steps of the process may be found in relevant sections of the toolkit.

Beyond integrating human rights commitments into existing policies and procedures, it is considered good practice for financial institutions to develop a standalone commitment to respecting human rights.

 

Case studies and further reading







Examples of bank Human Rights Statement


ABN AMRO’s Human Rights Statement addresses the Bank’s efforts to meet international standards, prioritise risks, track performance, and provide remedy, among other commitments. It also details how human rights commitments are supported by other operational policies and procedures, including those relating to privacy, corporate governance, diversity and inclusion, sustainability, and procurement. The Bank’s Executive Committee has ultimate governance responsibility, while individual departments maintain day-to-day responsibility for policy implementation. Mizuho Financial Group and Siam Commercial Bank have also issued Human Rights based policies.









Revising policies and processes in view of experience


In 2023, the Bank of Nova Scotia (Scotiabank) refreshed its Human Rights Assessment (HRA) and updated its Human Rights Statement, in order to validate and update its salient human rights issues and continue to proactively manage human rights risks and impacts. Scotiabank analysed and prioritised relevant human rights risks and impacts based on criteria in the UNGPs. This resulted in a priority list of 13 salient human rights issues for Scotiabank to monitor and manage, as part of its renewed human rights strategy. Concurrently, Scotiabank updated its Human Rights Statement, reviewing it against UNGP expectations, benchmarking against peer companies, and providing recommendations based on identified gaps.
















Embedding commitments




Internal training is key to ensuring that human rights commitments are embedded throughout an organization. With respect to financing operations, this can entail training for members of deal teams, risk functions, and business integrity teams on human rights topics and commitments. As part of its Human Rights Commitment, UniCredit describes its communication and training approach. This includes training relevant roles on key risk issues, including human rights risks. Commitments are further embedded through general induction training and specific training for managers.












Policies on supply chain and procurement risks




Citi Bank manages its supply chain risks through a risk management framework and Supply Chain Development, Inclusion and Sustainability Program. The Bank requires suppliers to comply with applicable laws and the Bank’s own supplier requirements. Additionally, Citi has developed a Statement of Supplier Principles which includes non-binding guidelines to suppliers in the areas of ethical business, human rights in the workplace, and environmental sustainability.


















Policy commitments addressing leverage through client engagement




In its Environmental and Social Risk (ESR) Framework, ING recognises that “We as a bank, our clients and other parties in the client’s supply chain can be involved in a human rights violation in various ways. Our involvement (being linked to, having contributed to or having caused the violation) is an important element to determine whether we should contribute to or use our leverage to seek to enable remedy provided by other parties.” The ESR Framework therefore sets out the expectation that clients will assess potential human rights risks in their supply chain and use their leverage to address the most severe human rights violations with their suppliers and customers (while acknowledging that managing supply chain human rights risks is complex).










 




Further reading