Who benefits from the shift to a good green economy?
Companies and countries are urgently trying to change behaviours and invest in renewable and low carbon energy sources in order to transition to a green economy. However, switching to electrification generated by renewables, such as solar, wind, and green hydrogen will increase global demand for critical minerals. It requires huge changes to infrastructure, such as grid expansion and modernisation, and relies on resilient clean energy supply chains.
Moving to a low carbon economy may result in an increased intensity of activities in indigenous peoples’ territories, in the extraction of critical minerals, and in the manufacturing of components such as wind turbines, heat pumps, and hydrogen electrolysers. These changes in demand and operations create a positive opportunity for business to establish new and improved industry practices across multiple sectors and industries, and deliver a people-centred green economy. Many industries have taken positive action on their environmental and social impacts in recent years, and delivering a just transition can support the continuation and expansion of these efforts.
A people-centred approach
The urgent need to invest in renewable and low carbon energy can act as a motivator to pay attention to the most vulnerable members of society. The global south is currently paying the highest price for climate change, both literally and metaphorically; through the direct economic damage caused by extreme weather events and through outcomes such as rising sea levels posing an existential threat to island nations and coastal communities. Utilising the momentum of a just energy transition provides a unique moment to consider how the multiple industries involved in delivering clean energy will adapt to changing societal expectations, and seize the opportunity to ensure that the health, wellbeing, and fundamental freedoms of workers and stakeholders in the global south are prioritised and nurtured.
As awareness of adverse human rights incidents increases, industries involved in the energy transition can act now to meaningfully incorporate and implement robust ethical commitments and human rights safeguards in related industries. Many organisations are taking proactive measures, such as supply chain mapping, stakeholder engagement, and policy effectiveness reviews to understand their community impacts, mitigate risks, and to invest in socially responsible activities that can significantly influence positive outcomes for a broad range of stakeholders.
Making the push for a just transition
For a just transition, businesses need to prioritise a number of human rights impacts into a group of “salient human rights impacts” for the most immediate attention and action. These are human rights that are at risk of the most severe negative impacts throughout the company’s operations and value chain.
Some key issues for business to consider include the provision of safe and healthy working conditions, measures to prevent child or forced labour, effective controls on environmental pollution, worker rights including non-discrimination and freedom to join a union, the need for robust consultation with local communities and the establishment of an effective grievance mechanism.
How DWF can help you
DWF Sustainable Business & ESG Advisory Practice works with organisations on the effective risk management of human rights and corporate governance including ethical decision-making and effective risk mitigation. We can support you based on our practical knowledge, experience and expertise based on our unique blend of legal, change management consulting, regulation and compliance skills and capabilities to:
- conduct supply chain mapping to identify risks and opportunities in value chains;
- design and/or conduct critical stakeholder engagement to build data-driven human rights strategies, policies and procedures;
- develop risk-based action plans to enable protection of workers, communities, consumers, and suppliers; and
- deliver a comprehensive human rights investigation and remediation service, drawing on legal, regulatory and compliance expertise that provides practical and risk-based actions to address issues and mitigate future risks.
Our DWF True Diligence market-led research, which surveyed 1200 UK and EU based C-Suite Leaders across six sectors on their preparedness for the EU Corporate Sustainability Due Diligence Directive, highlights the requirements for environmental and human rights impacts due diligence and the obligations to be met.
Read the DWF Practice Note here on practical steps for businesses can undertake to identify and assess human rights impacts as part of their risk-based human rights due diligence process.
