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.
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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.
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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�.�
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It is designed to help tackle human rights abuses globally by strengthening due diligence and grievance mechanisms.��
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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.��
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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.�
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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.��
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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.�
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In a recent RI survey, more than three-quarters of 130 respondents said investors should be included in human rights due-diligence rules.��
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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+.�