In a new report, Christian Aid examines the role of the private sector in delivering a just and equitable energy transition, and the need to ensure business both respects human rights and contributes to their fulfilment. The report finds a lack of regulations and corporate short-term profit maximisation are contributing to human rights and environmental concerns involving renewable energy companies and related sectors, such as mining of transition minerals. The report also draws from Christian Aid’s work supporting locally-led renewable energy solutions to demonstrate how these initiatives could deliver multiple benefits to human rights realisation.

With the private sector playing an increasingly critical role in the renewable energy transition, Christian Aid is calling on global leaders to adopt a binding international treaty on business and human rights that imposes clear duties on companies. More generally, we are calling governments to adopt national legislation to make it mandatory for businesses to respect human rights.

The findings in the report are based on three case studies. Firstly, new research tracks the global aluminium supply chain to expose how European electric car manufacturing is likely tied to human rights and environmental failings in the Brazilian Amazon. Drawing on evidence gathered from affected local communities by Brazilian civil organisations and researchers, the report documents the impact mining of bauxite ore in Oriximiná, in the state of Pará, used in many aluminium components for electric vehicles across Europe has had regarding deforestation of significant areas of tropical forest and on the rights of Indigenous people to access clean water and to their livelihoods. The report also documents concerns communities in the municipality of Barcarena, in the Brazilian Amazon, have raised for decades regarding the human rights and environmental impacts of alumina production in this municipality.

A second case study considers large-scale renewable energy projects and sets out the positive and negative experiences of communities affected by the Lake Turkana Wind Power Project in Kenya. A third case study considers Christian Aid’s work supporting locally led renewable energy solutions, drawing on case studies from Ethiopia, Honduras and Malawi.

The report considers how these case studies can inform energy policy and governance to deliver multiple benefits for human rights.

Energy transition has to encompass more than just technological change. We call for a just and equitable energy transition, one that centres human rights and transforms power relationships. An energy transition in which businesses not only respect human rights, but also contribute to their realisation, by ensuring the substantial benefits of decarbonisation are equitably shared, and communities who stand to lose out are supported. States have primary responsibility for taking action, but international financial institutions, intergovernmental organisations and businesses must also play their part. The new report sets out 10 principles for an accountable private sector in a just energy transition. Of these principles, the following four are particularly relevant to business practice.

• Make it mandatory for businesses to respect human rights.

Christian Aid research demonstrates that voluntary standards and private sector-led-frameworks for business are wholly inadequate to prevent, mitigate and remedy adverse business impacts on human rights and the environment. States should adopt mandatory regulations imposing clear duties on companies, including a corporate duty to:

• Conduct human rights and environmental due diligence, encompassing the entire value chain and the company’s entire corporate structure;
• Report sufficient information on company supply chains, covering each link in the supply chain;.
• Ensure effective, accessible remedy for historic, ongoing and other impacts, with a particular focus on addressing the experiences of women and other marginalised groups; and
• Engage effectively with all stakeholders.

At the international level, binding regulation is also needed, notably through the proposed UN Binding Treaty.

• Build institutional capacity to ensure businesses comply with laws and regulations.

Protective legislation is often poorly enforced. States should develop and implement strong and effective agencies at national and subnational levels to regulate and ensure compliance in key areas such as granting of permits, land rights and land and water use, environmental and human rights impact assessment, waste management, taxation, revenue and benefits sharing, and decommissioning and ecosystems restoration.

• Enhance transparency in all types of business entities and at all levels of government.

Citizens have a right to transparency in relation to the energy transition and its distributional impacts. States should improve access to information in key areas such as subsidies, taxation, price setting, and the use of public funds to leverage private investment. Companies should be required to be more transparent, particularly regarding value chains and tax payments. Existing standards for public country-by-country and project-by project reporting should be mainstreamed across countries and sectors through binding regulations, and complemented by a requirement for companies to publish their beneficial owners in publicly accessible registers.

• Effectively tax corporations to mobilise critical climate and development financing.

Progressive taxation is essential for states to raise resources to fulfil their human rights obligations and finance a just and equitable transition. Key elements include ending the ‘race-to-the-bottom’ on corporate taxation by establishing a global corporate tax rate of at least 25%, multilateral action to tackle corporate tax evasion and avoidance and taxing polluting companies to pay for loss and damage. States should apply the UN Guiding Principles for Human Rights Impact Assessments for Economic Reform Policies when considering tax reforms and put in place effective and transparent processes for publicly discussing tax exemptions in the context of the green transition.

by Juan Carlos Ochoa and Nadia Saracini, Christian Aid