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Business, Human Rights and Climate Due Diligence: Understanding the Responsibility of Banks

Author

Listed:
  • Chiara Macchi

    (Law Group, Wageningen University and Research, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

  • Nadia Bernaz

    (Law Group, Wageningen University and Research, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

Abstract

Under the 2011 UN Guiding Principles on Business and Human Rights (UNGPs), banks, like all businesses, have a responsibility to respect human rights and to carry out human rights due diligence. Although climate due diligence is not explicitly included in the UNGPs, tackling an enterprise’s direct and indirect climate change impacts is arguably a dimension of the corporate responsibility to respect human rights and should form part of the human rights due diligence process. At present, it is unclear how such responsibility applies to banks, whose contribution to climate change is mostly indirect. This article addresses the research question: how should the law be interpreted to form a coherent climate due diligence standard for banks? To address it, the article first maps out the climate responsibility of banks under international soft law standards and assesses privately developed guidance. It then elucidates the emerging concept of climate due diligence, reading climate change responsibilities into the now well-established corporate responsibility to respect human rights as authoritatively elaborated in the UNGPs. Finally, it explains how such normative standard applies to banks and unpacks the key elements that a bank’s climate due diligence process should include.

Suggested Citation

  • Chiara Macchi & Nadia Bernaz, 2021. "Business, Human Rights and Climate Due Diligence: Understanding the Responsibility of Banks," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:15:p:8391-:d:602740
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    References listed on IDEAS

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    4. MACCHI, Chiara, 2021. "The Climate Change Dimension of Business and Human Rights: The Gradual Consolidation of a Concept of ‘Climate Due Diligence’," Business and Human Rights Journal, Cambridge University Press, vol. 6(1), pages 93-119, February.
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    Cited by:

    1. Olga Martin-Ortega & Fatimazahra Dehbi & Valerie Nelson & Renginee Pillay, 2022. "Towards a Business, Human Rights and the Environment Framework," Sustainability, MDPI, vol. 14(11), pages 1-26, May.

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