Failure of Large Renewables Producers on Human Rights Underscores the Need for Accountability in a Just Transition

Renewable technologies and green investments are critical to achieving carbon neutrality, but the vital climate benefits of these projects do not mean they are without social and environmental risk. The Business and Human Rights Resource Centre recently published the first Renewable Energy and Human Rights Benchmark, which assesses the policies of 16 of the world’s largest publicly-traded wind and solar producers against human rights standards. The findings are alarming. To date, not one of the companies analyzed is fully meeting its responsibility to respect human rights, as defined by the United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles). This failure to uphold human rights not only leads to devastating impacts for affected people, it jeopardizes the financial sustainability of renewables projects and undermines the ‘livable future’ that the transition to a low-carbon economy aims to achieve.

The benchmarking analysis reveals that the large renewables companies “lack the essential human rights policies to avoid abuse of the communities and workers on which a just transition depends.” Bolstering these protections is an essential step to preventing abuse, but strengthening policies alone is not sufficient to prevent harm––as the experience of communities in Liberia and Mexico harmed by renewables projects that are subject to such standards makes clear. Alongside robust human rights and environmental policies, renewables investors need institutional-level community feedback tools that enable project-affected people to raise grievances and access solutions.

Such community feedback tools create a channel of communication between the individuals most impacted by investments––namely people living near and working at the projects––and the investment decision makers who need information from the ground. They are valuable not only for receiving feedback on whether an investors’ policies are upheld, but also for providing a forum to develop a path forward and capture lessons learned to prevent future harm. In the cases of the renewables projects in Liberia and Mexico mentioned above, investors were able to understand the unintended harms of their investments due to the existence of such community feedback tools.

Importantly, the benefits of these community feedback tools are possible because they are housed at the institutional level, accessible by both individuals internal and external to the company, and sufficiently independent from management. While accessible, independent institutional mechanisms have yet to become standard tools of private companies––only one of the 16 companies assessed in the benchmark received top scores for having an adequate mechanism in place––they are commonplace in development finance institutions. This development finance accountability system, which has been tested for over 25 years, is ripe for adoption and innovation by private companies. At Accountability Counsel, we’re working to seed the movement to build these tools.

Learn more about our advocacy for stronger accountability tools to promote more responsible investment here.