Stockholm (NordSIP) – The Danish Institute for Human Rights, together with the EIRIS Foundation, published the second iteration of the human rights benchmark covering Danish financial institutions. The 2025 benchmark considers the alignment of the largest Danish financial institutions’ with the UN Guiding Principles on Business & Human Rights (UNGP). The alignment of their financial activities with UN GP is based on publicly available policies and reporting. The findings suggest much is still to be done.
The report focuses on 23 financial institutions across the banking, insurance, pension and investment management industries, including Danske Bank, AP Pension, ATP, Danica Pension, PensionDanmark, PFA and Velliv. These organisations were assessed on eight indicators reflecting the UNGPs and derived from the World Benchmarking Alliance and Corporate Human Rights Benchmark methodologies: (i) Commitment to respect human rights, (ii) Responsibility for and resources on human rights, (iii) Identifying human rights risks and impacts, (iv) Assessing human rights risks and impacts, (v) Integrating and acting on human rights risk and impacts, (vi) Engaging with affected and potentially affected stakeholders, (vii) Grievance mechanisms for affected and potentially affected stakeholders, and (viii) Remedying adverse human rights impacts
Overall, the findings show a relatively low level of alignment, with a score of 37% indicating significant room for improvement. Noting that the estimated score on the occasion of the first edition of the benchmark in 2023 was 38%, the report notes that “linear progress is not a given.”
While there is a noticeable spread in individual scores, no company was able to document full UNGP alignment and 78% of the institutions have an overall alignment score at 50% or lower. The strongest performing assessment theme is policy commitment (63%), followed by due diligence (40%) and finally remediation (17%). Stakeholder engagement and remedy remain the worst performing issue areas. Pension funds on average have the highest overall score (54%), followed by investment management companies (36%), insurance companies ( 23%) and banks (21%).
The benchmark also highlights the role of the UNGPs as a reference framework when implementing and reporting under European sustainability regulations, to ensure that human rights risks and impacts in the downstream value chain are adequately captured. In their first-year European Sustainability Reporting Standards (ESRS)-based reports, financial institutions generally recognised the material impacts on their own workforce, as well as on consumers and end-users.
However, only a minority indicate workers in the value chain and affected communities as material topics. None of the banks, for instance, report workers in the value chain as a material topic. This tells us that negative impacts linked to financial activities are yet to be fully reflected in ESRS based reporting by FIs in a manner that adequately reflects their relative severity.
The majority of the financial institutions also report in accordance with the Sustainable Finance Disclosure Regulation (SFDR), including by publishing data on social Principal Adverse Impact (PAI) indicators. The study finds PAI data reported continues to be an unreliable proxy for gauging the human rights performance of financial institutions. This partly results from the unclear formulation of some of the PAI indicators, and partly from the under-specification by the organisations on the methodology underlying the reported data.
