Integrating human rights into company climate action

Our key takeaway: Companies are increasingly expected - by laws and lawsuits, investors, corporate benchmarks, civil society and consumers - to respond to climate change in a way that respects human rights. This is relevant, for example, when companies take action to transition into renewable energy, scale up circular economy, move to regenerative agriculture and implement nature-based solutions. What can companies do? Assess and address the human rights risks and impacts of their climate strategies and action plans grounded in the UN Guiding Principles, according to GBI. More specifically, companies can: (1) Map the “potential touchpoints” between human rights and climate action as a starting point. For instance, companies can look at how their scope 1, 2 or 3 emissions reduction strategies impact human rights; (2) Align policy commitments to the just transition and ensure human rights and environmental colleagues are involved in crafting policies together; (3) Conduct human rights due diligence for all measures aimed at tackling climate change and environmental issues, with meaningful stakeholder engagement at the core; and (4) Develop integrated governance structures and bridging silos between business functions to ensure that human rights and climate change can be approached in a holistic manner.

GBI published Integrating human rights into company climate action: Insights from business practitioners (January 2024):

• The case for integrating climate action and human rights: The report makes clear that “[c]ompanies have a normative responsibility to identify and address the human rights impacts of their climate action.” In addition there is a business case for companies - with three buckets of business risks (legal, financial and reputational) that companies may face if they fail to integrate their climate and human rights strategies. More specifically, the report highlights the following risks: 1) The growing mandatory human rights and environmental due diligence and reporting requirements at the EU and national levels; 2) The increasing number of lawsuits targeting companies’ actions on climate change and their impact on human rights; 3) The EU Taxonomy Regulation referring to the UN Guiding Principles and OECD Guidelines “as minimum safeguards required for activities considered sustainable”; 4) Various corporate benchmarks which can be used by investors to assess companies’ performance on climate and human rights, including interconnections between the two; and 5) Increased focus from civil society, including human rights and environmental defenders, on the human rights risks of climate action and companies’ responsibilities to address these issues.
  

• How can companies integrate climate action and human rights?: The report highlights several measures that companies can take to address climate action through a human rights lens: 1) “Map the potential touchpoints between climate action and human rights to understand potential entry points.” For instance, companies can look to see if, and where, they are taking measures to reduce their scope 1, 2 or 3 emissions and assess the human rights implications of these actions; 2) “Align policy commitments to help clarify the company’s vision for climate and human rights and ensure policy coherence.” This can include aligning human rights, environmental and climate policies with the just transition; 3) “Conduct human rights and environmental due diligence across all activities underpinning climate action. In conflict-affected areas, conduct heightened [human rights due diligence - HRDD]”; 4) “Ensure HRDD is informed by meaningful stakeholder engagement, to ensure the context and potential vulnerabilities of affected stakeholders in climate action is understood”; 5) “Ensure company grievance mechanisms cover human rights impacts related to the company’s climate action”; 6) “Develop integrated governance structures that can assist the company to approach climate action and human rights holistically”; and 7) “Raise internal awareness and coordinate internally to help bridge silos between colleagues working on climate, other areas of environment and human rights.”
  

• Cross-cutting measures companies can consider: The report sets out measures that companies across diverse sectors can apply when integrating climate action and human rights: 1) “Companies should conduct HRDD early and continuously to identify and address the impacts of these changes”; 2) “If transitioning out of assets or markets is necessary to meet climate targets, consider the human rights implications of leaving and exit responsibly”; 3) “A company’s climate action may include partnerships or other collaborations, such as with Indigenous Peoples; in such cases companies should approach the partnership or collaboration with respect for human rights”; and 4) "Since systems transformations are needed to ensure global climate targets are met, business may need to collaborate more closely with government and civil society to ensure that people are not left behind.”