Nearly half of the world’s biggest wind and solar companies have scored below 10% on human rights performance, according to the first benchmark ranking the renewables sector on protection of workers and communities.
The new benchmark – released by Business & Human Rights Resource Centre and advised by the likes of Boston Common Asset Management, Principles for Responsible Investment and LSE’s Grantham Research Institute – assesses 16 publicly-traded wind and solar producers against human rights standards.
The Renewable Energy and Human Rights Benchmark, which will be used in future years to measure companies’ progress, awarded seven of the 16 companies scores below 10%, and three quarters (12 out of 16) below 40%.
According to the research, since 2010 the renewables sector has attracted at least 197 allegations of human rights abuses – including killings, threats and land grabs – with around 40 in the last year.
Even the highest ranking company, Iberdrola, scored just 53% and had allegations of abuses against it, the paper noted.
Closely following Iberdrola at the top of the ranking were Acciona (51%), Orsted (47%) and Enel (44%).
Ranking lowest were the Power Construction Corporation of China (0%), China General Nuclear Power Corporation (2%) and US utility Southern Company.
The 16 companies benchmarked are: Iberdrola, Acciona, Orsted, Enel, EDP, EDF Energy, Engie, E. ON, RWE, Jinko Solar, Blackrock, NextEra, Brookfield, The Southern Company, China General Nuclear Power Corp and PowerChina.
Passive giant BlackRock and US investment manager Brookfield were included in the study due to the volume of operating capacity they own. They scored 6% and 4%, respectively.
Marti Flacks, Deputy Director of the Business & Human Rights Resource Centre, said: “Unfortunately, this benchmark shows the sector is falling short on human rights, especially on land rights and protecting indigenous people. This not only threatens harm to communities, but risks project delays and increased costs that could put the transition to a net zero-carbon economy in jeopardy.”
All 16 companies scored zero on respecting land rights, and only one had a public commitment on indigenous rights.
The research highlighted instances in which violations of local community rights have led to financial costs for companies, like a wind farm in Norway challenged by reindeer-herders over loss of land, a solar park in Mexico sued over lack of community consent, and a wind farm in Kenya cancelled after lawsuits by farmers and local landowners.
The research said the sector was on par with high-risk industries like apparel, agriculture, and extractives in terms of performance on basic human rights obligations, and suggested more scrutiny is required.
Not one of the companies meets the UN Guiding Principles on Business and Human Rights (UNGPs), the report said. This is particularly significant for investors in Europe that will be covered by the new EU Taxonomy Regulation. That regulation only considers green business activities to be sustainable if they also meet minimum social safeguards, which are expected to be based in part on the UNGPs.
The benchmark uses 13 core indicators from the Corporate Human Rights Benchmark to assess companies against the UNGPs, as well as a further 19 indicators for risk specific to the renewable energy industry. All 16 companies scored zero on at least one of the 13 UNGP core indicators.
In the foreword of the report, former President of Ireland Mary Robinson said: “The benchmark gives companies, investors, governments and wider civil society key information they need to ensure the industry accelerates adoption of human rights best practices. The results show there is a lot of work to be done.
“Investors should set a clear expectation that companies’ respect for human rights and meaningful engagement with communities is not optional, and they must challenge companies that are doing too little.”