- Improved vendor risk management processes
- Supported the second Thun Group discussion paper
- Strengthened understanding and awareness of human rights issues
In 2016, we saw rising public scrutiny, for non-state actors to uphold human rights in their activities. We follow the UN Guiding Principles on Business and Human Rights, which stipulate that financial institutions, and the wider private sector, have a responsibility to respect human rights wherever they operate. Amidst global economic instability, policy uncertainty, and flux within the financial sector, we need to take a proactive approach to collectively review and update processes, as an ongoing and formal part of daily business. We are aware of the fact that respecting human rights in the complex business environment of financial institutions requires ongoing and collective work with the other parties to scrutinize our practices and processes in light of changing global circumstances and an evolving global policy environment.
Raising awareness and broadening understanding
We continue to uphold our Statement on Human Rights, a public commitment to respect human rights, in line with the UN Guiding Principles. With a strong foundation made in 2015, 2016 focused on raising awareness and broadening understanding around the relevance of human rights issues across the organization, and on the implementation of the UK Modern Slavery Act.
To support this process we continued to offer training on human rights as part of our Environmental and Social (ES) risk training.
We continued to update our vendor risk management systems so that any risks in procurement are better managed. The integration of human rights aspects in a bank-wide vendor criticality assessment will help us to identify any vendors whose activities might inherently have a risk of causing human rights issues. In 2017, we will be formally assessing those businesses that we deem to be high risk.
In general, since human rights aspects are integral to our Group-wide ES Policy Framework, each year we deepen our knowledge and understanding, and raise awareness internally around the complexity of the issue through our client and transaction due diligence. This, in turn, helps us to consider human rights related risks and potential mitigation measures much earlier in our decision-making process.
Human rights grievance mechanisms
Our standard grievance mechanisms alert us to companies and transactions that may harbor human rights risks, so that we can take necessary measures. Working with the claimants, and in some cases the rights holders and other parties, our approach is to understand the background of the complaints, our potential role and leverage, and mitigation steps.
Working with our sector
In response to the absence of any formal interpretation of the UN Guiding Principles on Business and Human Rights for the financial sector, the Thun Group has emerged as an informal collaboration of banking representatives that shares insight on the implementation of the Principles. We continue to play an active role in the Thun Group; in 2016 we contributed to the development of its second discussion paper. The paper will explore the meaning and scope of Guiding Principle 13b3 in a corporate and investment banking context, as well as providing additional guidance around Principle 174.
The UK Modern Slavery Act
The UK Modern Slavery Act was introduced in 2015 to tackle slavery, servitude, and forced or compulsory labor, as well as human trafficking and the protection of victims. To comply with the Act, we have set up a working group of internal stakeholders, alongside an external law firm. The outcomes of this group will form the basis of the required statement, to be published in 2017, and will help us to understand where we need to improve our management processes.
To keep pace with the evolving regulatory and stakeholder landscape around human rights, we will focus on what is relevant to our activities and the contribution we can make as a leading global bank. We will uphold our commitment to continuously improve governance structures, management processes, stakeholder dialog, and transparent reporting around human rights issues connected to our business.
3 Guiding Principle 13b: “(…) requires that business enterprises seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.”
4 Guiding Principle 17: “In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.”