Fast transition imperilled by lack of justice in renewable energy companies
New research reveals sustained negligence on human rights by major asset-holders
To achieve a fast transition to clean energy, it will also have to be fair – with respect for the rights of communities and workers at its heart. Yet new research from the Business & Human Rights Resource Centre has found the renewable energy industry is generally way off-track on this goal.
The second edition of the only Renewable Energy & Human Rights Benchmark was published today (2 November) as COP26 focuses its discussions on the energy sector and financing. The Resource Centre assessed 15 of the top wind and solar energy companies on internationally accepted human rights standards. While modest improvements were recorded, the average company score remained a dismal 28%, indicating there is an urgent need for improvement within the sector if abuse of communities and workers are to be avoided - with all the protests, opposition and rising costs that result.
Key findings from the benchmark:
- The Resource Centre recorded over 200 allegations linked to renewable energy projects in the last 10 years, almost half (44%) linked to wind and solar sectors.
- Abuses include land and water grabs, violation of the rights of Indigenous nations, and the denial of workers’ rights to decent work and a living wage.
- Despite wind and solar projects requiring substantial amounts of land, no company had policies respecting land rights within its own operations.
- All companies scored zero on their commitment to respect the rights of human rights and environmental defenders.
- Barely one-quarter of companies had policies recognising and respecting the rights of Indigenous Peoples.
Most companies acknowledge the importance and timeliness of the industry embracing and integrating human rights into their business models, with the most significant score increases coming from companies which adopted more comprehensive human rights policies. However, there remains a significant gap between companies’ policies and practices across the board - which means close to nothing has changed for those experiencing abuses on the ground. The worst-performing companies include Blackrock (13%), Brookfield (11%), NextEra (4%), Southern Company (3%), Power China (3%) and China Nuclear Power Generation Corporation (2%).
In contrast, there were positive results. Companies which scored relatively low on the benchmark in 2020 have made several modest improvements, showing it is possible for companies to make policy improvements in a short period of time - and to do so in a way which is compatible with successful business models. Chinese company, Jinko Solar, showed marked improvement, increasing its score from 7% to 21% this year and moving it out of the bottom tier. In addition, most companies earned high or full scores for anti-bribery policies, worker health and safety reporting, grievance mechanisms and acknowledging the business obligation to respect and protect human rights.
Phil Bloomer, Executive Director, Business & Human Rights Resource Centre, said: “A just transition to clean energy is the only way we can urgently address climate breakdown. Renewable energy companies are growing exponentially, but without human rights safeguards to protect communities and workers, land grabs and abuse are growing too. This is putting the energy transition at serious risk as opposition and resistance grows. The renewable energy companies ignoring human rights will be faced with loss of social license to operate, ballooning project costs, and legal and reputational risks.
“The laggard asset-holders should rapidly learn from the mistakes of other land-hungry industries like extractives, as well as from their own sector’s leading companies, like Iberdrola, Acciona Energy and EDP. These leaders show there is a strong business case for a fast and fair energy transition.”
Jessie Cato, Natural Resources & Human Rights Programme Manager, Business & Human Rights Resource Centre, said: “World leaders are meeting in Glasgow for what is being referred to as one of the most important climate crisis conferences of our time. COP26 is hosting key discussions on the need for renewable energy investment to help countries meet their Paris Agreement emission targets – and investors involved in the sector have a significant role to play in ensuring the sector puts human rights at the heart of its operations. Investors must make clear a company’s human rights policies and practices are crucial elements of how they evaluate risk and performance of the companies they own.
“A vital component of a rights-based approach must see energy companies involving workers and the communities at the front lines. Unless these communities are treated as partners in the growth of clean energy, the sector will continue to face disruption and promote conflict along the way as communities resist. The sooner human rights issues become embedded within this rapidly expanding industry, the sooner the industry can demonstrate its full value in our collective fight against the climate crisis.”
- The Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts (positive and negative) of more than 10,000 companies across nearly 200 countries. We seek responses from companies when concerns are raised by civil society.
- The first human rights benchmark of the largest renewable energy companies was released in 2020. Read more about it here.
- Companies were assessed on the following 11 indicators:
- Governance and Policy Commitments
- Embedding Respect and Human Rights Due Diligence
- Remedies and Grievance Mechanisms
- Indigenous Peoples’ and Affected Communities’ Rights
- Land Rights
- Security and High-Risk Contexts
- Human Rights and Environmental Defenders
- Labour, Health, and Safety
- Right to a Healthy and Clean Environment
- Transparency and Anti-Corruption
- Equality and Inclusion