Human Rights and Sustainable Finance: Exploring the Relationship
Designing and building a sustainable financial system requires a broad focus on what sustainability requires in all its aspects and how finance can help deliver on that important objective. This task includes not only delivering financing for sustainable environmental outcomes and addressing climate change, but it also includes attention to the needs of a sustainable society. Societies in which segments of the population suffer extreme poverty, marginalisation and discrimination, lack access to basic healthcare and education, or lack the rule of law or freedom of speech, or must cope with dysfunctional, corrupt or unaccountable public institutions, create social pressures which, in turn, strain environmental and economic resources. It is difficult if not impossible to address the needs of a sustainable planet without taking account of the critical role that a sustainable society plays. It follows that a sustainable future for all requires a coherent vision of how the layers of society, economy, environment, and finance interact, and the role of the financial system in facilitating sustainable livelihoods and societies.
This working paper developed for the Inquiry by the Institute for Human Rights and Business aims to contribute to this debate through considering the role of human rights in delivering a sustainable finance system. It considers three levels of interaction between the financial system and human rights:
(i) the systemic level – how can regulatory actors and key regulatory leverage points incorporate human rights
(ii) the client level – how can financial institutions address the identifiable human rights impacts of their sovereign and corporate clients’ activities
(iii) the consumer level – how can financial institutions address the human rights impacts of their products and services directly on consumers and promote human rights enjoyment through new products and services.
By looking at these three levels, the Paper seeks to highlight the multi-faceted roles and contribution that human rights can make to a more sustainable and more ethical financial system.