Project delays, community conflict and ballooning costs are the price investors could pay if they ignore human rights risks in the renewables sector.

Early signs indicate discussions at COP27 in Egypt next month will be dominated by current threats to energy security – an important debate but one which threatens to drown out critical human rights concerns. Without rights-respecting renewable investment, companies and investors face potential opposition from local communities, which increasingly lead to project delays and suspensions, community conflict, and ballooning costs. Put simply, an energy transition which is fast but not fair will fail. Investors hold the balance of power and can ensure human rights are front and centre of the renewable energy industry.

Drawing on research conducted by the Business & Human Rights Resource Centre, the guide sets out the salient human rights risks and impacts associated with the renewable energy sector, particularly regarding human rights defenders and Indigenous Peoples. It provides practical information on how investors can engage proactively with their investee companies on human rights and environmental issues, both prior to and during investment. Between 2010 and 2021, Resource Centre data found one of the most serious and commonly occurring human rights issue in the renewables sector is the failure to respect the right to Free, Prior and Informed Consent (FPIC) of Indigenous Peoples, a right protected under international law. Land rights abuses are also a big concern, with over half (56%) of all attacks against defenders relating to violations of land rights.

Other key findings included:

• Nearly a third (31%) of all allegations of abuse in the wind sector related to FPIC issues.
• In the hydropower sector, 22% of all individual allegations of abuse related to land rights. In the wind sector, nearly a quarter (23%) related to land rights.
• Between 2015 and 2021, 369 attacks against defenders were recorded, including 98 cases of lethal attacks. Half of the non-lethal attacks were cases of judicial harassment (arbitrary detention and/or frivolous lawsuits or Strategic Lawsuits Against Public Participation).
• Most attacks against defenders were related to hydropower projects (331 attacks), followed by wind (34 attacks), solar (15 attacks), geothermal (8 attacks) and biofuel (1 attack).

Jessie Cato, Natural Resources & Human Rights Programme Manager, Business & Human Rights Resource Centre, said: “As the climate crisis intensifies, the need for swift and substantial investment into renewable energy projects has become more urgent. If we are to have any chance of meeting our climate targets, wind and solar energy installations must expand rapidly. However, as investors move to fill the investment gap, they must be aware of the human rights issues emerging in the sector and risking the clean energy transition.

“While renewable energy holds the key to our global future, it is far from immune to the human rights violations which have historically plagued the fossil fuel industry. Our research has shown how human rights and land defenders – those on the frontlines of the climate movement – are facing increasing levels of threat and intimidation. Investors are uniquely placed to influence the development of this key sector and ensure it positions human rights at its core, resulting not only in a sustainable path to a global green energy transition, but also helping create a sector that remedies past inequalities exacerbated by the traditional profit driven extractive model.

“We want investors to be aware of the critical role they play in this transition. When investors fail to consider human rights an essential part of the energy transition, they expose themselves and their portfolio companies to reputational risk and legal and financial costs. These can be significant and take varying forms: project delays, cancellations or suspensions and community conflict – all of which may endanger the energy transition entirely. Investors have an opportunity to use their leverage to act now and ensure the energy transition is not just fast, but fair. Our guide is essential reading for investors who want to sidestep these risks and maximise shared benefits for themselves, their portfolio companies, local communities – and the planet at large.”

//ENDS

Note to editors:

• 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.
• Renewable Energy & Human Rights Benchmark: The first human rights benchmark of the largest renewable energy companies reveals that most lack the essential human rights policies to avoid abuse of the communities and workers on which a just transition depends.
• Transition Minerals Tracker: Tracking the human rights implications of the mineral boom powering the transition to a net-zero carbon economy.
• COP27 open letter: In October 2022, over 200 organisations called on the Secretariat of the United Nations Framework Convention on Climate Change (UNFCC) and State parties to put human rights at the centre of climate action. The letter was coordinated by the Business & Human Rights Resource Centre and Indigenous Peoples’ Rights International.
• The guide can be accessed here.