Latin American banks are meeting fewer than half of their responsibilities under the UN Guiding Principles on Business and Human Rights, said non-profit BankTrack in its Human Rights Benchmark Latin America report, published this week.
BankTrack assessed 17 banks against 14 criteria across four main topics: policy commitment, human rights due diligence process, reporting on human rights, and remedy. For each criterion, each bank received a score of 0, 0.5 or 1, with a maximum achievable score of 14. The assessment found the highest scoring bank, BBVA México, achieved only 7 points.
The research was based on the banks’ own disclosures in public documents.
More specifically, BankTrack found that while the majority of banks have a commitment to respect human rights in line with the requirements of the UN Guiding Principles, policy commitments were not effectively translated into concrete actions.
In particular, 11 Latin American banks have made a clear commitment to respect human rights as part of a statement of policy. However, only BBVA México’s policy commitment was approved at the most senior level of the business (in this case, the board of directors). Moreover, only four banks — BBVA México, Bradesco, Citibanamex and Santander — have a comprehensive human rights due diligence process across the entire business.
According to BankTrack, projects or companies financed by some of these banks are linked to human rights abuses. Bradesco, Banco do Brasil, Caixa Econômica Federal and Santander all provided financing to JBS, the world’s largest meat processing company, which has been implicated in human rights violations, including slave labour.
JBS is also facing opposition to its planned US share listing after New York attorney-general Letitia James announced she would be suing the American arm of the company, alleging that it misrepresented its environmental impact, as reported by the Financial Times earlier this month.
The BankTrack report also says that while some banks have begun to restrict financing for companies active in oil and gas extraction in specific Amazon regions (such as BNP Paribas, Société Générale, Intesa Sanpaolo, and Standard Chartered), none of the assessed Latin American banks have made such a commitment.
“Banks’ human rights commitments appear to serve more as image-building strategies for the benefit of investors and clients, rather than genuine efforts to address adverse human rights impacts for the benefit of affected communities,” said co-author of the report Inés Racionero Gómez.
Banks respond
A Santander spokesperson replied in a written statement: “Santander operates strict policies that govern our financing for the whole group, approved by our board of directors. Our board-approved responsible banking and sustainability policy sets out Santander’s ESG commitments, including human rights protection for our employees, customers, suppliers and the communities we serve. It upholds the highest standards, such as the United Nations Guiding Principles on Business and Human Rights and the Universal Declaration of Human Rights.”
The spokesperson added: “We are working with clients, as well as other banks, governments, and regulators to improve practices in the region with a particular focus on issues associated with indirect supply chains. We recognise this is a highly complex challenge that requires a multifaceted, multilateral response and we are fully committed to playing our part.”
A statement from Itaú Unibanco read: “Itaú Unibanco informs that all its policies and guidelines on the subject are public and available on its website, including the fulfilment of its commitments.”
Bradesco responded: “Bradesco is guided by the best practices in governance, social responsibility, and sustainability. Bradesco’s activities, policies, and voluntary commitments are accessible on the bank’s websites and institutional reports. The bank does not comment on relationships with customers.”
And Banco do Brasil’s response stated: “In 2023, we consolidated our best sustainability practices. We improved management, increased the sustainable business portfolio, expanded the offer of products with social and environmental characteristics and reinforced our internal structure that takes care of the ESG theme.
“We released the Sustainability Plan – Agenda 30 BB (2023-2025), which resulted in 47 actions and 100 indicators, already reflecting the premises of the global 2030 agenda and the international call for the construction of a world guided by the adequate management of natural resources, respect for human rights and generation of value for society and the environment. In 2024, sustainability will continue to be central to our brand and business.”
All banks assessed in the report have been contacted for comment.
