Ensuring respect for human rights when financing development

Ensuring that human rights are respected by development finance institutions investing in business projects in the Global South is indispensable to sustainable development.

To embed human rights more firmly in financing business projects in the Global South, the Institute collaborates directly with a wide range of public and private financial actors. In 2020, one of them was the Swedish state’s development finance institution, Swedfund, whose investments are mainly focused on Sub-Saharan Africa and certain regions of Asia.

As a result of the Institute’s work with Swedfund, the Swedish institution now has a toolkit to help guide the funds they invest in. The toolkit will aid in their efforts to ensure respect for human rights when investing in portfolio companies.

Many development finance institutions have respect for human rights as a formal requirement of investee companies and funds. However, they may not have the capacity or tools to implement this expectation throughout their operations. Developing and utilising such tools is therefore an important step forward.

Development finance institutions offer capital in the form of loans and guarantees to funds, private investors, local companies, and companies who wish to do business in developing economies. They aim at funding projects that would not be eligible for traditional commercial financing. By investing in such projects they strive to create jobs, boost growth and fight poverty and climate change.