Responsible business conduct in the financial sector
Promoting responsible business conduct (RBC) in the financial sector is vital to building a sustainable global economy. In the past the financial sector has developed due diligence systems aimed at financial risk, however the use of due diligence to prevent or mitigate environmental and social risks is a new, yet growing, expectation within this industry.
The due diligence processes recommended by the Guidelines can help financial institutions evaluate the risks of adverse impacts and respond to them appropriately. However, the inherent complexities in the sector such as extensive and complex business relationships, the rapidity of transactions, and operations which do not fit neatly into the model of suppliers and buyers in a supply chain make application of the Guidelines challenging. Questions remain around practical application of effective due diligence systems with regard to minority ownership stakes, passive investment strategies and index funds.
In this context, the OECD is engaging in a multi-stakeholder process to develop a guidance that will clarify the potential approaches for application of due diligence for RBC in the financial sector.
Expert letters and statements on the application of the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights in the context of the financial sector, 2014