International Human Rights Due Diligence: Practical Application for Nigerian Financial Institutions

This paper examines the application of international human rights due diligence requirements to Nigerian financial institutions, drawing on the UN Guiding Principles on Business and Human Rights (UNGPs), the OECD Guidelines for Multinational Enterprises, and emerging mandatory due diligence legislation in the European Union. Nigerian banks, insurance companies, and investment funds are increasingly expected to integrate human rights risk assessment into their lending, investment, and operational decisions, particularly in relation to clients in the extractive, agriculture, and real estate sectors. Using a professional analysis methodology, the research reviews international due diligence standards and assesses their current adoption by Nigerian financial institutions, drawing on Central Bank of Nigeria (CBN) sustainability frameworks, Nigerian Stock Exchange ESG disclosure guidelines, and financial sector sustainability reports. It examines how human rights risks, including those associated with land grabbing, forced evictions, and labour exploitation, arise in the financing portfolios of major Nigerian banks and evaluates whether current risk management systems adequately identify and address these risks. The paper also considers how Nigerian financial institutions can engage constructively with international due diligence expectations without incurring disproportionate compliance costs. Findings indicate that human rights due diligence practices are nascent in the Nigerian financial sector, with most institutions lacking dedicated human rights risk assessment frameworks. Recommendations include mandatory human rights due diligence guidance from the CBN, capacity building for ESG officers, and industry-wide adoption of the Equator Principles. Keywords: human rights due diligence, UNGPs, Nigerian banks, ESG, business and human rights.