Business and Human Rights: The Environmental Dimension – climate change

The impact of climate change on human rights is considerable and complex. Air pollution can contaminate the air we breathe; droughts can result in hunger and famine; floods can impact housing and access to potable water. If it is indeed accepted that climate change has an impact on human rights, then by extension businesses will not be able to prevent adverse human rights impacts unless they integrate climate change into their human rights due diligence processes.

This imperative is being driven among other things by approaching mandatory human rights and environmental due diligence legislation (see our Blog posts here and here) and expanding reporting requirements on environmental and sustainability matters expand (see, for example, our Blog posts here, here and here).

Human Rights and Climate Change – assessing adverse impacts

While it is well-established that climate change and human rights are linked by cause and effect, there are important differences in how adverse human rights and environmental impacts manifest that present challenges to companies in assessing who is impacted, how they are impacted and who is responsible for those impacts. This dynamic was summarised in a webinar on Corporate Due Diligence and the Green Deal by Associate Professor Surya Deva of the City University of Hong Kong and current Vice-chair of the UN Working Group on Business and Human Rights. In particular:

• Conceptual – Traditionally human rights have been predominantly focused on individual rights. In contrast, climate change has long been present as a global issue, impacting the whole of society all over the world.
• Rights Holders – In applying due diligence measures, businesses have to identify the rights holders who will be impacted. In human rights terms, businesses can identify the populations of individuals or communities that may be impacted by their activities. In respect of climate change, it is more a question of who is not impacted by a company’s activities. Climate change is an issue that will impact future generations too. Given the linkage between human rights and climate change, it follows that future generations may experience adverse future human rights impacts from today’s environmental harms.
• Impact Identification – It is usually possible to readily identify adverse human rights impacts arising out of environmental harms. For example, pollution in a river that contaminates a water supply can be visible to the naked eye. In contract, the adverse impacts of climate change are very difficult to quantify and the full extent of the consequences are not yet known. This creates particular challenges for companies in setting their own climate change targets.
• Attributing Responsibility – Principle 13 of the UN Guiding Principles on Business and Human Rights states that businesses have a responsibility to:

1. Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; [and]
2. Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.

This concept is for the most part fairly straightforward in as much as the rights holders and related impact identification (see (2) and (3) above) can be identified through human rights impact assessments and effective human rights due diligence. Climate change considerations are more challenging – that is, it is by no means easy to, identify and quantify the adverse impacts (both environmental and human rights) caused by a company’s activities.

The nexus between human rights and climate change has been recognised and examined by the UN. In particular, the UN Special Rapporteur on Human Rights and the Environment has a mandate that focuses on inter alia sustainable environment as a human right. One tool that may support an assessment of adverse impacts relating to human rights and climate change is the Environmental Rights Database, which describes more than 100 good practices identified by the UN Special Rapporteur in the use of human rights to protect the environment.

A holistic approach – incorporating environmental considerations such as climate change into human rights due diligence

To help “future proof” against the increasing wave of mandatory human rights and environmental due diligence legislation heightened regulatory reporting requirements, and ever-increasing expectations from stakeholders such as investors and NGOs, companies should consider adopting a holistic approach towards the management of all ESG risks, including in respect of human rights and the environment. This will typically involve cross-functional collaboration across an organisation, for example, close coordination of at least the procurement, sustainability, ethics & compliance, human resources and legal functions. It is particularly important for companies to clearly articulate their governance framework around human rights and the environment in public disclosures going forward.

Best-in-class companies are applying the below strategies to continually improve their human rights and environmental risk management:

1. Integrating human rights into group policies and strategic planning processes;
2. Disclosing how human rights considerations are integrated into strategies, policies and procedures;
3. Carrying out a human rights impact assessment and taking proportionate counter-measures, as well as communicating internally and externally on what measures have been taken;
4. Reviewing and reinforcing complaints mechanisms and speak-up programs;
5. Ensuring the business is well equipped to deal with ‘crises’;
6. Reviewing the extent to which their board is equipped to address supply chain risks; and
7. Reviewing the role, resources and expertise of the legal and compliance functions, who should play a key part in addressing these new challenges