Content: This paper sets out the regulatory aspects linked to human rights in investments by financial service entities, including latest legal development and expectations for various stakeholders. It finally provides practical recommendations on how to integrate human rights into the investment decision-making process aligned with the UNGPs.
Year: February 2019
Keywords: Sustainable Finance, Green Finance, Responsible Investment, ESG, UN Sustainable Development Goals, United Nations Principles for Responsible Investment (UN PRI), UN Guiding Principles on Business and Human Rights, Human Rights Risks, Human Rights Due Diligence.
While there is a strong focus on climate and environmental issues in sustainable or ESG finance (Environment-Social-Governance), we should not lose sight of human rights, or the “S” in ESG.
Therefore, this paper sets out the regulatory aspects linked to human rights in investments by financial service entities (be it through banks, insurance companies or asset managers/funds). This discussion is of particular importance to the Luxembourg financial industry as a major financial hub and the biggest fund industry in Europe. By depicting the recent legal developments in the financial sector, this paper outlines the different responsibilities and expectations for various stakeholders. Finally, practical recommendations to meet such expectations will be provided.