A/HRC/4/99 page 7 21. To illustrate the dilemmas arising from different standards within the industry, an example was shared where some banks terminated relationships with companies investing in a particular country following a United Nations report about human rights abuses in that country but competitor banks took over the business of the banks who withdrew. It was suggested that if a transaction is economically feasible, it will find money - if not from a bank with environment, social and governance (ESG) standards, then from elsewhere. Another example concerned a client in a developing country who had already secured money from a regional bank; the bank found deficiencies in the Environment and Social Impact Assessment (ESIA) of the project but nonetheless chose to engage, since it would have no leverage if it did not participate at all. The bank had the in-country assessor on the project work with an international firm, thereby building capacity in local markets. 22. There was discussion about the risk-based approach of the financial sector to protecting and promoting human rights, with some participants wondering whether that approach delivers the desired outcomes with respect to human rights. A question was posed as to whether assessing risks to the potential financial outcome versus assessing risks to rights are fundamentally different approaches. Financial and human rights perspectives of risk were considered by some to be incompatible; an example was shared of a company that chose not to recall a dangerous product because the cost of the recall would be more than the cost of potential litigation concerning lives lost. 23. Some participants posited that the issues faced by financial institutions are not only about risk, but must be considered in a broader context of potential new markets, their entire supply chains, and their reputation among current and potential employees and consumers. It was suggested that financial institutions not be looked at in isolation, since their direct footprint is quite small, but instead in relation to their clients to understand the full scope of the potential influence and impact of the sector. 24. There was discussion about the obligations of financial institutions to respond to civil society inquiries. FIs are expected to uphold principles of transparency with regard to information and provide processes for redress, but on the latter must be careful not to subvert the role of Government. Some NGO participants shared responses to specific claims of abuses that they had received from FIs. These included: refusal to disclose any information; reliance on the partners of the FI for information; a decision to leave the investment; a positive response by the FI’s environmental officers who were then trumped by the finance officers; and a reliance on the judgement of the IFC. There was a call for banks to demonstrate their commitment, including through increased transparency towards communities. III. PROJECT FINANCE: WHAT HAVE WE LEARNED SO FAR? 25. The third session was moderated by Salil Tripathi (Senior Policy Adviser, International Alert) and aimed to review the understanding and initiatives to date regarding human rights issues specific to project finance.