BlackRock and Brookfield have been called out for receiving low scores in an assessment of the human rights practices and policies of the largest global renewable energy companies conducted by the Business & Human Rights Resource Centre (BHRRC).
The findings come from the second edition of the centre’s Renewable Energy & Human Rights Benchmark, which evaluated 15 of the largest wind and solar energy companies and investors against the UN Guiding Principles on Business and Human Rights and sector-specific indicators for renewables.
Alongside utilities and other renewables operators, the list includes two asset managers: Blackrock and Brookfield Asset Management, both of which appear among the six companies highlighted as the worst performers.
“The low scores indicate many renewable energy companies may face profound challenges dealing with legal and reputational risks associated with human rights concerns, as well as securing their access to burgeoning ESG investments,” said BHRRC. “Such risk is not isolated to a single company; incidents linked to poor due diligence could rapidly undermine the whole sector’s reputation.”
For example, the indicator assessing companies’ basic human rights due diligence commitments, management systems and processes saw five companies receive a zero score, including Brookfield, which boasts Mark Carney as its Vice Chair and Head of Transition Investing.
BlackRock was explicitly criticised for not receiving points in the assessment of disclosure of key data regarding their health and safety performance. However, the report also highlighted Blackrock was the only one out of two companies to receive a score for committing to pay all its employees a living wage.
The report also claimed that none of the companies assessed have policies respecting land rights within their own operations, nor have any adopted policies committing to non-retaliation against human rights and environmental defenders.
In response to the BHRRC’s claims, a spokesperson from Brookfield told RI: “Brookfield is committed to operating to the highest ethical standards, which includes ensuring our activities respect and support the protection of human rights across our global operations.”
Blackrock told RI: “Concern about human rights is a fundamental issue for BlackRock. The benchmark seeks to compare asset operators and financial investors, while ignoring their very different profiles. As such, we believe that it presents a misleading picture of BlackRock Real Assets’ sustainability efforts.”
However, there were also signs of progress. The total score range for benchmarked companies in the top third rose from 38%-53% to 48%-60% compared with last year. Iberdrola, Acciona Energy, and Energias de Portugal (EDP) achieved the highest marks.
Moving forward, the BHRRC recommends investors establish a human rights standard for all renewable energy investments (for both investors and investor-owned companies), as well as develop an engagement plan with renewable energy investees to insist on action to remove human rights and environmental risks from operations and supply chains, and the associated reputation, legal, and regulatory risks.
It also calls for governments to introduce new green frameworks to direct investment flows to “responsible” renewable energy infrastructure.