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With rare exceptions, banks continue to fall woefully short on human rights policies. The U.N. Guiding Principles on Business and Human Rights set out authoritative global standards concerning corporations’ — including banks’ — human rights obligations. Banks must respect human rights: they must conduct robust due diligence to ensure that none of their transactions, from project finance to debt underwriting, support projects that infringe on human rights. And they must support remedy for victims when rights abuses do occur. By and large, banks still fail to recognize these obligations at the level of policy.
This huge policy gap is resulting in systematic failures in the practice of human rights due diligence and remediation — identifying, preventing and addressing human rights abuses. This leaves banks complicit in human rights abuses across the whole range of fossil fuels.
To name just a few examples, coal mining has led to abuses by contracted security forces, forced displacement, and abuses of the rights to water and a healthy environment. Coal-fired power plants have impacted the right to health of local communities. Tar sands oil and Arctic drilling have impacted or threatened the rights to health, culture and livelihood of Indigenous communities, and drilling has been conducted on the back of serial violations of the right to free, prior and informed consent. Even six years after BP’s Deepwater Horizon disaster, ultra-deepwater drilling brings threats of spills that abuse coastal people’s rights to health and livelihood. LNG export infrastructure puts coastal communities at risk of explosions, while threatening their rights to clean water.
But taking the long view, the last year’s most significant development regarding human rights and fossil fuels may be the emerging recognition that climate change is itself a human rights issue. Climate change — as well as the extraction, transportation, and combustion of fossil fuels — is increasingly impacting the human rights to water, food, health, housing, and more. In the years to come, this growing recognition will add urgency to the need for banks to reform their human rights policies and practices as they strive to meet their obligations to prevent runaway global warming.