Twelve major banks operating in Luxembourg have significant room for improvement in protecting human rights, according to a new study by the Duty of Care Initiative (IDV) and the international NGO BankTrack.
Presented to the press on Tuesday, the report reveals that the evaluated institutions scored an average of just 5.2 out of 15 points, falling below the international average. The study concludes that the financial sector in Luxembourg is currently failing to do enough to safeguard human rights.
Researchers identified notable shortcomings in the screening of potential human rights violations, overall transparency, and the treatment of affected communities. None of the 12 banks could demonstrate that they have effective measures in place to compensate individuals harmed by their financed activities.
Additionally, while general human rights guidelines often exist, the study found a lack of concrete information on how these policies are implemented in practice, particularly regarding the inclusion of affected individuals in decision-making processes.
In response, the IDV is calling on financial institutions to assume greater responsibility by rigorously screening their funding for potential negative impacts and reporting their findings transparently. The initiative is also urging the Luxembourg government to impose stricter regulations on the financial sector as it implements the European directive on corporate duty of care.
During the press conference, IDV representatives emphasised that while Luxembourg aspires to be a pioneer in sustainable finance, this ambition must encompass the rigorous protection of human rights – an area that currently requires substantial improvement.
