ESG 2.0: A Human Rights Approach The astonishing growth of ESG has been an important and valuable development in efforts to advance responsible business. It has helped raise awareness and mobilize capital for ESG issues among companies, Same responsibility, different tools and paved the way for regulatory action on While the underlying responsibility to material ESG disclosure. At the same time, respect human rights is the same for the ESG movement has notable blind spots all FIs, the means through which the and opportunities to improve, particularly in responsibility is met may vary—at times how it addresses social topics. significantly. This is because the scale and complexity of the leverage tools and strategies available to diverse FIs, BSR seeks to build on the successes of e.g., commercial banks, asset managers, the ESG movement and contribute to the private equity firms, venture capital, and sustainable transformation of the financial pension funds, differ. Leverage tools may services industry by synthesizing ESG and include: human rights approaches that help deliver • Incorporating human rights more strategic value to investors—and most expectations into client contracts importantly—to build a financial system that • Engaging companies in constructive respects human rights. dialogue and capacity building efforts • Filling shareholder proposals and Achieving this transformation requires proxy voting aligning ESG efforts with the approach set • Participating in peer-to-peer and out by the UNGPs. The UNGPs provide multistakeholder platforms that promote responsible business a roadmap for FIs to identify, prevent, conduct mitigate, and account for how they • Engaging policymakers and address human rights impacts in their own standard-setting bodies to operations and connected to their activities, create environments that enable products, or services through business responsible business conduct • Providing space and resources for relationships, including clients and portfolio start-up entrepreneurs to conduct companies. due diligence 12 HUMAN RIGHTS ROADMAP FOR TRANSFORMING FINANCE