Human Rights Due Diligence in Nigerian Banks: Integrating the UN Guiding Principles into Financial Sector Practice

This study investigates the integration of human rights due diligence practices into the operations of commercial banks in Nigeria, drawing on the UN Guiding Principles on Business and Human Rights and the Equator Principles for financial sector human rights risk management. Nigerian banks play a significant role as financiers of extractive industry projects and large-scale infrastructure developments with direct human rights implications, yet domestic regulatory frameworks do not currently mandate human rights impact assessments within financial sector operations. The research adopts a professional practice orientation, examining publicly available sustainability reports, Environmental, Social and Governance (ESG) disclosures, and Central Bank of Nigeria sustainable banking principles compliance records of five major Nigerian commercial banks. Interviews are conducted with bank ESG compliance officers, institutional banking teams, and civil society organizations engaged in responsible finance advocacy. Findings reveal that while ESG reporting has increased in Nigerian banking, human rights-specific due diligence remains rudimentary, confined to environmental checklists and lacking robust community impact analysis. The study recommends the Central Bank of Nigeria revise its Sustainable Banking Principles to incorporate mandatory human rights due diligence criteria aligned with the UNGPs, and develop a sector-specific guidance note for financial institutions financing high-risk projects. It further recommends that banks establish dedicated human rights focal points within their compliance departments. Keywords: human rights due diligence, banking sector, UNGPs, sustainable finance, Nigeria.