Renewable energy sector not ready to deliver a fair energy transition, new report finds
BHRRC’s 2023 Renewable Energy & Human Rights Benchmark reveals insufficient action by renewable energy companies to build public trust and respect Indigenous Peoples’ rights, land rights and tackle forced labour.
Despite welcome examples of better practice, lack of sector action threatens the urgent clean energy transition needed to tackle climate breakdown.
A rapid overhaul of global energy systems is critical to contain the climate crisis. The renewable energy sector must play a central role, but without squandering public trust by fuelling further harms to people and planet. Yet our new Renewable Energy & Human Rights Benchmark has found while the sector has made progress in adopting broad human rights policies, it falls woefully short in addressing critical human rights risks and harms. As the private sector embraces the opportunities offered by the energy transition, companies must do more to ensure the energy transition delivers shared prosperity, corporate human rights due diligence, and fair negotiations with communities and workers. The speed of the energy transition depends on it, as does the success of their industry. Current approaches are generating project delays, mounting costs and reputation risk.
The 2023 Renewable Energy & Human Rights Benchmark assessed and scored the human rights policies and practices of 28 leading companies across the renewable energy supply chain, including wind and solar project developers, oil and gas companies entering into renewables, and wind turbine and solar panel manufacturers.
Although there has been some progress in the adoption of broad human rights policies by the sector, it is far from ready to deliver a fast and fair transition that builds public support and delivers shared benefit. Instead, the 2023 Benchmark highlights notable gaps between policy and practice, and dangerous shortcomings regarding Indigenous Peoples’ rights, land rights, and forced labour, in particular. Time is of the essence to reverse these trends if the renewable energy sector is to avoid the same risks and abuse that plagues the traditional energy industry.
Key findings from the 2023 Renewable Energy & Human Rights Benchmark included:
- All companies scored poorly (an average of 1%) in respect of their responses to all serious human rights allegations included in the Benchmark.
- Policies and practices on Indigenous Peoples’ rights and land rights remain poor, despite these rights being the subject of the highest number of serious allegations.
- No company currently publicly discloses its full solar panel supply chain, resulting in scores of 0% across the board for this indicator.
- Solar panel manufacturers lag significantly on human rights commitments and practices compared with wind energy equipment manufacturers.
- In examples of better practice, eight companies have policies in place specifically to respect the rights of environmental defenders, showing progress of the sector at policy level in a critical area.
Overall, the Benchmark revealed clear frontrunners among the 28 companies assessed, who are demonstrating what is possible by the renewable energy sector. These efforts must be supported by smart government regulation and incentives, alongside investor engagement, to level the playing field and ensure the renewable energy sector secures public trust and avoids harms to communities and workers.
Phil Bloomer, Executive Director, Business & Human Rights Resource Centre, said, “This benchmark is a loud wake-up call to this critical sector. It highlights the risks companies are generating for themselves, workers, communities and the urgent transition to clean energy. Leading companies are beginning to get their house in order and demonstrate that building public trust by creating shared prosperity and avoiding abuse is both profitable and a moral imperative. But the many laggard companies need to urgently change key aspects of their business model if they seek stable and cooperative investment environments with communities and workers. Their long-term profits, and the fate of our planet, depend on decisive action.
“Unsustainable inequality is, arguably, the single greatest obstacle to a fast transition. Well-designed clean energy transitions will ensure communities and workers feel direct benefit and lend public trust. But without responsible business conduct, there is a profound danger the distribution of benefits are skewed to the wealthy and powerful, and the costs and risks to the majority and vulnerable.”
Caroline Avan, author of the report and Senior Researcher at the Business & Human Rights Resource Centre, said: “While we have identified several key areas of progress by the sector, the Benchmark highlights that the pace of change by industry must now increase rapidly. As is, the gap between policy and practice is simply too large. The broad range of scores recorded highlights profound differences in performance between leaders and laggards – but also that company prioritisation of human rights is both possible and profitable.
“Building public support also means companies must be transparent on the toughest issues the sector is facing – including forced labour. This requires departing from business-as-usual approaches and pursuing assertive, corrective action, like solar supply chain transparency. The energy transition also offers unique opportunities for the most progressive companies willing to co-construct the sector with local communities and Indigenous groups to generate sustainable shared prosperity.”
Notes to editors:
- Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts of companies across the globe.
- Please see also; The 2023 Electric Utilities Benchmark (also published today, 15 November 2023, by the World Benchmarking Alliance and CDP) assesses 68 of the world most influential electric utilities companies on their alignment to a low-carbon world, underscoring the importance of decarbonisation in the sector and emphasising the critical role companies must play to ensure a truly just energy transition.
Media contact: Priyanka Mogul, Media Officer, Business & Human Rights Resource Centre, +44 (0) 7592156010, [email protected]