Enhancing human rights impacts of development finance
Today, the Danish Institute for Human Rights (DIHR) and the Danish Investment Fund for Developing Countries (IFU) publish a summary of a DIHR review of IFU’s current approach to meeting the UN Guiding Principles on Business and Human Rights (UNGPs) conducted earlier this year. While the review identifies many strong elements to IFU’s approach, it also includes a number of suggestions on how the development impact of its investments can be enhanced by further aligning with the UNGPs.
IFU is Denmark’s Development Finance Institution. IFU provides risk capital and advice to companies wishing to set up business in Africa, Asia, Latin America and parts of Europe. Investments are made on commercial terms in the form of equity and loans. The purpose is to contribute to economic and social development in the investment countries.
"Development Finance Institutions, such as IFU, are uniquely placed to put human rights at the centre of sustainable growth and development. However, doing that requires an ongoing review, update and implementation of policies and procedures to ensure that project companies act with respect for human rights. We commend IFU for looking openly at how to better ensure that negative human rights impacts associated with its investments are avoided and addressed. Such efforts have the potential to benefit a range of rights-holders including workers and communities in countries of operation," says Signe Andreasen Lysgaard, Strategic Adviser on Corporate Engagement, DIHR and Project Manager on the recent collaboration with IFU.
Investing in human rights for the SDGs
The Sustainable Development Goals (SDGs) are at the heart of IFU’s mission and provide an opportunity for approaching the implementation of the UNGPs as key to fulfilling IFU’s purpose.
Addressing the improvement areas identified in IFU’s current approach will involve a focus on policies, procedures and practical implementation. IFU’s current development of an action plan to improve its human rights performance, and not least a forthcoming strategy process for IFU as such, makes it is an opportune time for IFU to recalibrate and strengthen its focus on human rights.
In early 2017 DIHR was approached by IFU to support the organisation in assessing the degree to which IFU is meeting the global standard on business and human rights, the UNGPs. DIHR has done the review as part of our Corporate Engagement work in line with our mandate to engage directly with companies to protect and promote human rights.