How Financial Institutions Can Manage Human Rights-Related Risks
The story of human rights in the US is one of ongoing struggles as diverse movements seek to push for—or against—a more inclusive, just, and dignified country for all people.
Foto: Photo by Nigel Harris on iStock
Key Points
- The story of human rights in the US is one of ongoing struggles as diverse movements seek to push for—or against—a more inclusive, just, and dignified country for all people.
- The recent rollbacks in abortion and LGBTQI+ rights are the latest examples of this tension, one which financial institutions (FIs) across the country must now grapple with.
- BSR has released a new report, Navigating Rollbacks in Reproductive and LGBTQI+ Rights in the US: A Guide for Financial Institutions, to help companies responsibly navigate instances in which US state laws are at odds with universally recognized human rights.
Two years since the US Supreme Court overturned Roe v Wade, more than 20 states have banned some or all abortion care. States have also restricted LGBTQI+ rights with 571 anti-LGBTQI+ equality bills introduced in state legislatures in 2023 and 77 signed into law. At least 23 states now limit or ban access to gender-affirming care.
Healthcare providers and others who help patients access care now face criminal penalties. In some states such as Texas, children may even be taken from parents who support their gender expression. Meanwhile, organizations providing financial support for reproductive care and businesses that are inclusive of LGBTQI+ communities are increasingly targeted by policymakers.
This fractured landscape poses human rights dilemmas for consumer banks, fintech platforms, and credit card issuers seeking to comply with the law while operating responsibly. For instance, in states where abortion is illegal, health insurance no longer covers abortion care, so individuals use personal credit cards, debit cards, cash, and payment platforms such as Apple Pay, Venmo, and PayPal to cover abortion-related expenses, including medication, telehealth visits, and out-patient care.
The greater the distance individuals must travel to access abortions, the higher the financial burden. Meanwhile, gender-affirming care may require ongoing medical visits, medication, and other interventions which extends the financial paper trail over time. As a result, prosecutors may work in collaboration with law enforcement to gather financial information such as purchasing history or transaction data to prosecute individuals and healthcare providers.
This legal context is destabilizing for business and exposes Financial Institutions (FIs) to financially-material risks. Yet “staying out of it” is not an option—by a margin of two to one, consumers and workers want to live and work in states where reproductive and LGBTQI+ rights are guaranteed. Shareholders are calling on companies, including FIs, to safeguard sensitive customer and user data that may be used to prosecute abortion cases, and regulators are requiring global companies operating in the EU to assess, address, and report on the negative human rights impacts connected with their activities.
Navigating this terrain is complex and the fear of public backlash has led to a chilling effect among many FIs who are increasingly reluctant to speak out publicly. At the same time, little guidance exists to help them manage their approach to legal compliance in ways that respect abortion and LGBTQI+ rights to the greatest extent possible, in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs). The UNGPs clarify that “where domestic laws fall short of internationally recognized human rights, companies should uphold the higher standard. And where laws conflict with those standards, they should seek ways to honor human rights principles within the boundaries of the law.”
There are also no industry or multi-stakeholder initiatives aimed at supporting FIs in navigating government action that undermines human rights. In the technology industry, the Global Network Initiative is a multi-stakeholder collaboration focused on helping tech companies navigate law enforcement data requests that undermine the rights to privacy and freedom of expression.
To address the growing risks to reproductive and LGBTQI+ rights, BSR has published the report, Navigating the Rollbacks in Protection of Reproductive and LGBTQI+ Rights in the United States: A Guide for Financial Institutions, which seeks to equip FIs to assess the implications of legislative developments for how they operate and impact people, weigh competing stakeholder claims, and uphold human dignity. The report summarizes how financial institutions may be involved with human rights impacts and the associated material risks, and provides recommendations on companies’ data practices, handling of law enforcement data requests, de-risking activities, lobbying efforts, and discriminatory or inequitable provision of financial services and healthcare coverage.
Adopting a principles-based approach to navigating this context provides FIs with a roadmap for operating in an increasingly unwieldy patchwork of state laws and regulations in ways that align with human rights principles and create long-term value.
For further information on the guidance report, or to discuss any of the issues raised further, please reach out to the Human Rights team.
