Responsible business conduct in the financial sector
Operationalizing RBC Due Diligence amongst financial sector practitioners
Promoting Responsible Business Conduct (RBC) in the financial sector is vital to building a sustainable global economy. However certain characteristics of the sector, including diverse and extensive business relationships, a complex landscape of regulatory obligations, and the nature of various transactions, can make the practical application of effective due diligence systems challenging.
The OECD Centre for RBC has worked to operationalize RBC due diligence for different financial transactions and actors through developing fit-for-purpose guidance.
Responsible Business Conduct for Institutional Investors (2017)
OECD RBC standards play a key role in the sustainable finance ecosystem
RBC standards play an important role in the context of sustainable finance as they provide authoritative and widely accepted recommendations for identifying, managing and reporting on environmental, social and governance impacts associated with clients or investments.
They have been enshrined in sustainable finance regulation and leading standards and initiatives.
Examples of RBC integration in key sustainable finance regulations
The EU Sustainable Finance Disclosure Regulation (SFDR) introduces transparency rules for financial institutions on the integration of sustainability risks and impacts in their processes and financial products, including reporting on adherence to internationally recognized standards for due diligence, specifically that of the OECD
The European Central Bank’s guide on supervisory expectations related to climate risk management and disclosure includes recommendations on carrying out due diligence and ensuring compliance with the OECD MNE Guidelines
RBC referenced in international standards and initiatives on sustainable finance
The Equator Principles (2020), a financial industry benchmark for identifying, assessing and managing environmental and social risks in project finance include specific expectations on human rights due diligence
RBC or ESG - What's the difference?
"RBC” and “ESG” terminology both relate to environmental, social and governance considerations, which drive and define sustainable finance approaches and activities. “ESG” is commonly used to discuss environmental, social and governance issues which pose financial risks. RBC risks refer specifically to the risks of adverse impacts with respect to issues covered by the OECD Guidelines for Multinational Enterprises — impacts on society (including human rights and labour) and the environment, independent of financial impact to the company itself. In practice, RBC risks can also have financial implications (negative or positive) for the company concerned.
Reports and resources
Responsible Business Conduct in the Financial Sector in Latin America and the Caribbean
Responsible Business Conduct in the Financial Sector in Costa Rica
Responsible Business Conduct in the Financial Sector in Panama
Business and Financial Outlook 2021: Promoting responsible lending in the banking sector