The finance sector has an important contribution to make to the upholding of basic human rights. The sector can contribute directly by mobilising savings for investment, insuring or providing finance for energy, water or other key infrastructure, and by ensuring that projects are developed and implemented in a socially responsible manner. The sector can also promote human rights indirectly through social investment and by participating in initiatives to support the promotion of human rights.

Notwithstanding these positive contributions, human rights issues represent a risk to banks and investors. There is a compelling argument for financial institutions to assess the potential for human rights-related risk in prospective transactions and business relationships, as an integral part of due diligence.

Financial institutions must consider three specific issues when thinking about the human rights implications of their loans or investments.

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Social and Environmental Risk Assessment for Heavy Industries
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