Week of 8 November 2021
The renewable energy sector’s green halo is not bright enough to block out its human rights impacts
Our key takeaway: At our current climate crisis point, the world desperately needs investment in renewable energy. However, risks to communities, indigenous peoples and workers have persisted in the sector and threaten to undo positive progress on clean energy unless companies and investors can meaningfully address their human rights impacts.
The Business & Human Rights Resource Centre (BHRRC) released the second edition of its Renewable Energy and Human Rights Benchmark, which measures “the human rights policies and practice of 15 of the largest publicly-traded wind and solar power generation companies, including two investors with significant renewable energy holdings”:
- Company performance remains poor, with the biggest gaps on the most urgent human rights risks: “The results of our second benchmark remain profoundly concerning, with an average score of just 28%.” The companies that scored lowest overall include Blackrock (13%), Brookfield (11%), NextEra (4%), Southern Company (3%), Power China (3%), and China Nuclear Power Generation Corporation (2%). More concerning, companies across the board scored lowest on the indicators representing the sector’s most salient human rights risks. For example, no company has a policy to explicitly respect land rights or identify legitimate land tenure rights holders, none of the benchmarked companies had adopted an explicit policy on human rights and environmental defenders, and “[i]ndigenous rights often intersect with abuses related to land rights and environmental defenders, yet barely one-quarter of companies had policies explicitly recognising and respecting the rights of Indigenous Peoples.”
- More companies are improving their human rights policies … but this is offset by a persistent policy-action gap: The performance of companies in the top third “rose to 48%-60% compared with 38%-53% last year. Iberdrola (60%), Acciona Energy (58%) and Energias de Portugal (EDP) (56%) led this group and achieved the highest marks. EDP increased its score by 18% compared with last year, the largest increase in the group, showing companies can make significant policy improvements in a short period of time.” In addition, the average score increase for all companies was 6%, and no company’s performance worsened since last year. These findings show that companies are beginning to address human rights risks, though most of the increased scores came from companies implementing stronger human rights policies. While BHRRC acknowledges progress on policies as a positive first step in a high-risk industry, “policies alone change little or nothing in the immediate term for those experiencing harm and abuse.”
- Companies and investors both have a role to play in making the renewable energy transition just: BHRRC calls on the private sector to bridge the policy-action gap by conducting robust and meaningful human rights due diligence. BHRRC recommends that companies set timebound, measurable goals to implement human rights and environmental due diligence throughout their value chains, including a commitment to access to remedy. They should align their actions to the UNGPs, ensuring that “the approach is proactive and consults those at risk of abuse,” that adequate resources are put behind this work, and that it is subject to executive oversight and board approval. Companies should also work collectively to influence policy decisions that better protect human rights and can explore collaborative models for energy projects. For their part, investors should not only have their own human rights policies and HRDD in place, but should also push investee companies to implement robust HRDD consistent with the UNGPs. Investors should engage with companies “to insist on urgent and decisive action to remove human rights and environmental risks from operations and supply chains, and the associated reputation, legal and regulatory risks,” and should both demonstrate and call for more public disclosure on human rights practices in the sector.
For more, see Business & Human Rights Resource Centre, Renewable Energy and Human Rights Benchmark: Key Findings from the Wind and Solar Sectors (November 2021)