Decent work plays a fundamental role in our effort to have a good life in today’s society. Amid rising unemployment and workplace inequality, financial service institutions, including banks, play a crucial role in driving changes and encourage responsible labor practices in businesses.

Path to Decent Work

Decent work is key to individual wellbeing and societal resilience. It goes beyond having a well-paying job and also encompasses upholding rights at work, having comprehensive social protection, and having opportunities for social dialogue.

However, unemployment has been a serious global issue. Young graduates struggle to find jobs, while existing roles remain rife with issues around equal pay, workplace safety, and diminishing workers’ rights.

In this case, banks, as financial service institutions, are uniquely positioned to promote decent work for all. They have the capacity to direct financial flows, enabling them to influence companies to adopt responsible labor practices that safeguard workers and support long-term economic resilience.

Role of Banks

A guide by UNEP FI, the ILO, and signatories to the UN Principles for Responsible Banking (PRB) explores several ways banks can promote the adoption of decent work among their clients.

For instance, banks can enhance the alignment between their investment and lending portfolios with rights at work and social protection principles. This can be done by conducting assessments on clients’ decent work implementation, while simultaneously providing targeted support for concrete actions.

Banks can also be a catalyst in promoting responsible and equitable labor practices by directing financial support toward enterprises that adopt or scale emerging decent work practices.

Depending on the context of companies and country regulations, this support can take the form of sustainability-linked loans, social bonds, or blended finance structures. The goal is to incentivize and support companies to invest in skill development, equal living wages, and broader social protection schemes for workers.

Integrating Principles

To do this, banks must integrate decent work into their core strategies. This includes aligning policies and processes with existing international standards, such as Sustainable Development Goal 8 and the ILO standard. Furthermore, this alignment should be reflected outwardly in banks’ portfolio decisions, client and stakeholder engagement, and partnerships.

Ultimately, the path to realizing safe, equitable, and inclusive work for all must be built with joined hands. As financial service institutions move to create an enabling environment for decent work, businesses must follow suit by actively promoting fair wages, establishing strong workplace safety mechanisms to eliminate harmful practices, and investing in opportunities for employees to develop their skills while maintaining their health and wellbeing.

Editor: Nazalea Kusuma

Co-create positive impact for people and the planet.

Amidst today’s increasingly complex global challenges, equipping yourself, team, and communities with interdisciplinary and cross-sectoral insights on sustainability-related issues and sustainable development is no longer optional — it is a strategic necessity to stay ahead and stay relevant.

Join Membership Partner with Us