UN Human Rights office confirms banks’ human rights responsibilities

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The UN’s Office of the High Commissioner for Human Rights (OHCHR) has confirmed that banks do have responsibilities when it comes to the impacts of companies in which they hold shares on behalf of clients. According to OECD Watch Banks have often argued that they have little or no responsibility where the bank’s client is the “beneficial owner” of the shares, although the bank typically arranges the share purchase, is publicly listed as the owner of the shares and often allows its client to invest in the company anonymously.

The OHCHR was asked by OECD Watch to respond to two questions. Firstly, whether the relationship between a financial institution (FI) and a company in which it holds shares on behalf of a client as a custodian or nominee shareholder constitutes a ‘business relationship’ under the UN Guiding Principles on Business and Human Rights (UNGPs). Secondly, if they do, how the FI should ensure that it meets its responsibility to respect human rights, particularly in cases of severe human rights impacts. See further (source)