This paper explores the nexus between climate change strategy and action by financial institutions (FIs) and the responsibility to respect human rights in accordance with the UN Guiding Principles on Business and Human Rights (UNGPs).

It discusses a series of pitfalls for financial institutions to avoid as they operationalize climate-related commitments and explore the social (“S”) dimensions of the challenges and opportunities presented by the activities of portfolio companies. It explores how the human rights lens of the UNGPs – complemented by over a decade of practice since their endorsement – can inform efforts to ensure transition and adaptation efforts respect peoples’ dignity.

The paper is a companion piece to Shift’s report: Climate Action and Human Rights: How the UNGPs can help companies respect human rights when responding to climate change. It benefited from discussions between banks and ECAs in Shift’s Financial Institutions Practitioners Circle.