UN steps up corporate human rights expectations
Treaty to underpin state-led negotiations in October 2021
August 27, 2021
The names of some banks and investment funds have been included in an internationally recognised document compiled to help clamp down on private-sector human rights abuses.
A just-released third draft of the United Nations (UN) Binding Treaty on Business and Human Rights is being negotiated by the open-ended intergovernmental working group (OEIGWG) under the UN Human Rights Council. The draft comes shortly after a recent announcement that a group of top international investors are launching a new collaboration to promote human rights in the corporate world.
A Responsible Investor (RI) report said the treaty is described as a “legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises”.
It is designed to help tackle human rights abuses globally by strengthening due diligence and grievance mechanisms.
The RI report said a record of OEIGWG’s sixth session shows a representative from Panama proposed the inclusion of the names of financial institutions and investment funds under its definition of eligible business activities.
The new iteration of the treaty will be the basis for state-led negotiations in October when the seventh session to discuss details will take place since OEIGWG was formed in 2014.
The UN’s efforts mirror those of the European Union’s Sustainable Corporate Governance Directive, which is set to impose mandatory due diligence rules for human rights and environmental issues.
That directive only currently covers Limited Liability Companies, but the European Parliament wants to expand it to all corporations operating in the EU internal market, including banks and investors.
In a recent RI survey, more than three-quarters of 130 respondents said investors should be included in human rights due-diligence rules.
The global ESG newswire has also revealed the Principles for Responsible Investment, a UN-supported international network of investors, is working to establish a shareholder engagement network for human rights, similar to greenhouse gas emitters battling group, Climate Action 100+.