Integrating a human rights-based approach in European development finance institutions

International financial institutions (IFIs) and development finance institutions (DFIs) are pivotal in advancing sustainable and inclusive development. As they operate in challenging contexts, DFIs have established policies and procedures to reduce harmful impacts on people and the environment, and there is a growing commitment in the industry to embrace a human rights-based approach to their investments. However, due to the diversity of DFIs in size, strategies, and capacities, this approach is not yet standardized.

The European Centre for Development policy Management (ECDPM), an organization aiming to initiate inclusive and sustainable development policies in Europe and Africa, recently published the report ‘Integrating a human rights-based approach in European development finance institutions’. Sustainable food systems are a main area of work for EDCPM and therefore relevant for Good Food Finance.

This paper aims to outline human rights-based approaches for IFIs and DFIs, highlight good practices, and discuss some of the challenges linked to their operationalisation. The paper concludes by presenting ten recommendations for European DFIs to strengthen their approach to human rights, clustered into five main areas:

(1) policy commitment and mandate;

(2) management of negative impacts;

(3) human rights promotion;

(4) integration of HRBA principles and toolboxes in DFIs’ operations;

(5) the case of co-financing.

The recommendations strive to support continuous improvement and standardisation of human rights based practices, however, higher ambitions on the human rights agenda should not translate into divestment from more challenging countries and sectors.