Navigating the Rollbacks in Protection of Reproductive and LGBTQI+ Rights in the US

Industry Investment Rating - The report does not explicitly provide an investment rating for the financial institutions (FIs) or the industry as a whole [1][2][3] Core Report Findings - Recent rollbacks in reproductive and LGBTQI+ rights in the US have created a fragmented legal landscape, exposing FIs to legal, reputational, and financial risks [8][9] - Two prominent areas affected by these rollbacks are reproductive rights, including access to abortion, and LGBTQI+ rights, impacting an estimated 70 million people [9] - Following the overturning of Roe v Wade in June 2022, 14 states have made abortion illegal, with healthcare providers facing financial and criminal penalties [9] - In 2023, 571 anti-LGBTQI+ equality bills were introduced in state legislatures, with 77 signed into law, many criminalizing gender-affirming care [9] Financial Institution Involvement - FIs may be involved in adverse impacts on reproductive and LGBTQI+ rights through the collection of financial and personal data, handling of law enforcement requests, and barriers to accessing financial products and services [18][19] - FIs may also contribute to inequitable healthcare coverage and workplace discrimination, as well as the use of undue influence in public affairs [19] - The right to equality and nondiscrimination is at heightened risk in the current US context [20] Material Risks for Financial Institutions - FIs face global compliance risks as governments outside the US enact regulations requiring companies to assess and report on human rights impacts, with potential penalties including fines and reputational harm [14] - Employee mobility, attraction, and retention are affected as workers prefer to live in states where abortion and LGBTQI+ rights are guaranteed [15] - Investors are increasingly concerned about data privacy policies and practices, particularly how sensitive customer data is handled [16] - Consumer expectations and reputation risks are significant, with 79% of Gen Z respondents believing people should have the right to decide whether to continue a pregnancy [17] Recommendations for Financial Institutions - FIs should adopt a principles-based approach to navigate the US context, aligning with the UN Guiding Principles on Business and Human Rights (UNGPs) [21][22] - Steps include making and embedding a commitment to respect human rights, assessing impacts on reproductive and LGBTQI+ rights, and addressing or mitigating conflicts [22][23] - FIs should avoid overcompliance, ensure equitable treatment in financial services, and use rights-respecting leverage through multistakeholder engagement [23][24] - Monitoring the effectiveness of measures and demonstrating efforts to respect reproductive and LGBTQI+ rights are also recommended [25] Conclusion - The fragmented legal landscape and political polarization in the US expose FIs to ethical dilemmas, including safeguarding customer privacy and ensuring equitable workplaces [158] - Adopting a principles-based approach grounded in the UNGPs framework provides FIs with a roadmap to navigate these challenges and support human dignity [159]