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Part III Sustainable Finance, 16 The Emerging Human Rights and Environmental Due Diligence Responsibility of Financial Institutions

Régis Bismuth

From: International Monetary and Banking Law post COVID-19

Edited By: William Blair, Christos Gortsos, Chiara Zilioli

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 28 May 2024

Financial regulation — Monetary system — Money and inter-state obligations — Legal proceedings and monetary obligations

The responsibility of financial institutions in the global value chain of money appears to be one of the new frontiers of corporate accountability. This chapters explores the different legal channels through which the responsibility of financial institutions may be incurred when their activities are linked to or generate adverse environmental and human rights impacts. It intends to understand what major trends are currently shaping how the issue of the responsibility of financial institutions in such cases is likely to be addressed. In that regard, this chapter first clarifies the distinction between the respective obligations of public and of private financial institutions. It then explores the growing importance of the due diligence paradigm for corporations in a litigation context. At the end, it considers what due diligence entails or could entail for financial institutions and the divergent interpretations (from the financial sector, international organizations, and NGOs) it has so far received regarding its implementation in practice.

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