Background

Human rights and environmental issues are becoming a core consideration for financial institutions (FIs). FIs can play an important role in mitigating and adapting to the triple planetary crisis of biodiversity loss, pollution and climate change and are increasingly investing in the environment, including in the transition to renewable energy. However, for these efforts to contribute to sustainable development, FIs must avoid causing or contributing to negative impacts on human rights. FIs can enhance their positive impact on society by leveraging their influence with clients/investees to promote respect for human rights and enable access to remedy.  

Increasingly FIs in the Asia Pacific region are adopting human rights policies or adjusting and enhancing environmental and social frameworks to align with the Guiding Principles on Business and Human Rights (UNGPs). Under this global framework, FIs have a responsibility to respect human rights, including the right to a clean, healthy, and sustainable environment. There is also a clear expectation that FIs implement human rights due diligence processes to identify, prevent, and address adverse impacts on people. In case of harms, FIs are also expected to cooperate with or provide access to remedy for affected victims. Moreover, FIs must establish or participate in effective operational-level grievance mechanisms (OLGMs) available to individuals and communities who may be adversely impacted. While some of these mechanisms are already in place in some FIs in the region, there is very little evidence of effective remedy for affected persons in the context of investment and lending activities. There is still a need for further understanding among FIs on how to implement this effectively in line with Guiding Principle 31 of the UNGPs.

The role of States in ensuring access to remedy is crucial. The UNGPS clearly state that “[a]s part of their duty to protect against business-related human rights abuse, States must take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction those affected have access to effective remedy.”  

The Office of the United Nations High Commissioner for Human Rights (OHCHR) has developed guidance for access to remedy for development finance institutions . Additionally, other civil society actors have made efforts to develop a remedy ecosystem approach in the financial sector, encompassing not only the obligation to provide remedy and establish effective remedy mechanisms but also enhancing the role of the financial sector in enabling remedy through leverage .  The United Nations Environment Programme Finance Initiative (UNEP FI) currently hosts a human rights community of practice among banks and insurance and is launching a new version of the Human Rights Guidance Tool for the Financial Sector this year. The new version will provide a step-by-step guide to help financial institutions to align with the UNGPs, focusing primarily on human rights issues relevant to the assessment of business relationships and transactions. Sector profiles with specific sectorial information will be also available. Together these form part of the growing array of tools and guidance available to financial institutions to enhance their understanding of human rights risks.​

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Objectives

​This multistakeholder panel discussion will shed light on how financial institutions strengthening social and environmental frameworks can play a key role in improving the approach to remedy and preventing harm. It will also reflect on the main practical challenges involved in developing effective access to remedy mechanisms and the obstacles faced by right holders in accessing effective remedy. Additionally, the role of the State and regulators in promoting access to remedy based on specific requirements or policies will be discussed. The session will also explore leading practices in ensuring access to remedy to mitigate and address human rights, and social and environmental risks.  

The session will be spotlighting the UNEP FI Human Rights Guidance Tool for the Financial Sector as a useful tool for FIs. 

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The key objectives of the session are:

• Explore the role of financial institutions in relation to mitigating and adapting to the triple planetary crisis and how this can contribute to the fulfilment and protection of human rights, including the right to a clean, healthy and sustainable environment while avoiding preventing and addressing human rights adverse impacts related to these efforts.

• Discuss how social and environmental frameworks, along with human rights policies, can incorporate a robust and effective approach to remedying adverse impacts. 

• Reflect on the difficulties and obstacles that rights holders may face in accessing remedy in practice and identify the main gaps in existing OGM from human rights perspective.  

• Highlight some of the main human rights and environmental risks associated with financial investment in the environment in Asia and the Pacific today. 

• Increase understanding on the role of Financial Institutions to safeguard human rights and the environment through human rights and environmental due diligence. 

• Discuss how the duty of States to protect human rights can ensure access to remedy to people impacted on their human rights in context of financing and provide States with key recommendations in this regard.  

• Share key aspects of the UNEP FI Human Rights Guidance Tool for the Financial Sector and how these can be useful for Financial Institutions.
  Identify best practices for access to remedy in the financial sector.

Questions

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• How financial institutions strengthening social and environmental frameworks can play a key role in improving the approach to remedy and preventing harm?

• The main practical challenges involved in developing effective access to remedy mechanisms and the obstacles faced by right holders in accessing effective remedy

• How can the UNEP FI Human Rights Guidance Tool for the Financial Sector help Financial Institutions in understanding human rights risks and safeguards in financing for the environment?

• What roles do different stakeholders – Financial Institutions, businesses, Governments, the UN, civil society and environmental human rights defenders play in promoting access to remedy?

• What are some good examples/leading practices by Financial Institutions in ensuring access to remedy to mitigate and address human rights, and social and environmental risks?

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Format

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This one-hour session will include an overview of the UNEP FI Human Rights Guidance Tool for the Financial Sector and a moderated multi-stakeholder panel discussion with speakers from the private sector, the Government, the UN, and civil society. The audience will be invited to contribute and engage with the session through a Q&A segment.

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The session will be held in person and in English language.

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