SKN | Danish Financial Institutions Fall Behind on Human Rights Risk Disclosure — What HNWI Should Know

Key Takeaways

• A benchmark of 23 Danish financial institutions reveals weak alignment with global human rights standards, with overall disclosure scores averaging just 37%.
• Banks score especially low on implementation, stakeholder engagement, and remediation, highlighting structural transparency gaps.
• For globally mobile wealth holders, disclosure shortcomings can translate into underestimated ESG risk embedded in cross-border portfolios.

Global private banking clients increasingly demand rigorous Environmental, Social, and Governance (ESG) risk frameworks that include credible human rights risk disclosure. A recent benchmark of Danish financial institutions — spanning banks, pension funds, insurers, and investment managers — shows most lagging materially in aligning financial activities with the UN Guiding Principles on Business and Human Rights (UNGPs).

For families and executives stewarding capital across borders and through Swiss private banks, this gap matters more than academic debate: it affects counterparty risk, portfolio risk modelling, and reputational exposure in jurisdictions where regulatory and client expectations are tightening.

Benchmark Findings and Disclosure Gaps

The 2025 benchmark, compiled by the Danish Institute for Human Rights together with the EIRIS Foundation, assessed 23 of Denmark’s largest financial institutions against eight human rights indicators derived from global standards. These include commitments to respect human rights, resources allocated to human rights risk management, actual identification and assessment of risks, and mechanisms for remedying adverse impacts.

On average, institutions scored 37% of possible alignment — barely above minimal compliance and essentially flat from prior benchmarks. Banks sit at the bottom of the ranking, averaging roughly 21%, well behind pension funds and asset managers on key dimensions such as due diligence and documentation of mitigation outcomes.

Implications for HNWI and Nordic Counterparties

For high-net-worth individuals with exposure to Nordic financial counterparties, the benchmark suggests that publicly available disclosures fail to capture material human rights risks associated with financed activities, particularly across global value chains. Swiss private bankers and their global clients are not evaluating ESG in isolation. Disclosure quality directly influences risk pricing, regulatory compliance, and the integrity of wealth held or managed outside the client’s home jurisdiction.

Human rights risk disclosure is increasingly embedded within European regulatory frameworks — notably the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Due Diligence Directive (CSDDD) — which push financial actors to integrate human rights considerations into risk assessments and capital allocation decisions. Incomplete or superficial disclosure in one jurisdiction can impair risk models used by Swiss fiduciaries, particularly for cross-border funds, structured notes, or syndicated credit exposures anchored in Nordic or EU markets.

Operational and Reputational Considerations

For ultra-high-net-worth individuals whose capital preservation strategy includes lending, private credit, or bespoke structured exposures, this creates discrete risk: counterparties with weak implementation and remediation frameworks may fail to signal latent ESG liabilities that could crystallize under tightening regulations or litigation.

Beyond the regulatory angle, the absence of credible human rights due diligence can amplify reputational risks — a core concern for HNWI who depend on discretion and steadiness over headline volatility. Financial intermediaries that score poorly on human rights metrics risk becoming focal points for stakeholder activism or negative media coverage, particularly as institutional investors, sovereign wealth funds, and asset servicers increasingly demand traceable, enforceable policies.

Practical Questions for Swiss Private Banks

For Swiss private banks with Nordic or EU client linkages, this poses operational questions: how are third-party partners vetted? How are human rights risks integrated into counterparty credit reviews? Are liability buffers calibrated to account for latent ESG exposures? Failing to address these questions can subtly erode the resilience of bespoke investment structures.

Monitoring Trends and Forward-Looking Considerations

High-net-worth investors should monitor developments that directly intersect with human rights disclosure dynamics, including refinement of European Sustainability Reporting Standards (ESRS), regulatory enforcement actions under SFDR and emerging CSDDD provisions, and growing integration of human rights dimensions into credit risk and counterparty assessments by major rating agencies.

For portfolios anchored in Swiss private banks, calibrating exposure to counterparties with weak human rights disclosure requires proactive due diligence and scenario planning — not reactive adjustments. Discretion, legacy preservation, and structural efficiency depend on anticipating how non-financial risks are quantified, disclosed, and managed in the global financial ecosystem.

For a confidential discussion on integrating human rights risk considerations into your cross-border wealth strategy, contact our senior advisory team.