London-based non-profit the Business & Human Rights Resource Centre applied various human rights-related criteria to the world’s 16 largest clean energy companies, which represent over 130 GW of operational solar and wind generation capacity, as ranked by U.S.-based business intelligence service Bloomberg New Energy Finance.
The results showed none of the companies surveyed had formulated a land rights or land acquisition policy nor a process to determine how to fairly trans-locate people displaced by renewable energy projects or supply chain operations, such as the mining of raw materials.
Every company scored zero – out of a maximum two – for at least one of 13 core indicators formulated to align with United Nations (UN) standards, which the report’s authors dubbed “the ‘floor’ of corporate respect for human rights.” Seven of the companies analyzed, stated the report, scored zero or one for the entire list of UN-based minimum human rights standards.
Although the Business & Human Rights Resource Centre did not specify which seven companies were concerned, Chinese PV manufacturer Jinko Solar, the only solar manufacturer on the list, scored 4% on the UN-based index as one of seven companies which scored 0-4%. The others were U.S. investment fund BlackRock, compatriot utilities NextEra and The Southern Company, Canadian fund Brookfield, and the state-controlled China General Nuclear (CGN Power) Power Corp and Power Construction Corp of China (Powerchina).
Shortfalls
The Business & Human Rights Resource Centre reported none of the companies – including Spanish utility and rankings leader Iberdrola – demonstrated any evidence they could identify human rights-related supply chain risks; none announced how they determined indigenous people and ancestral rights; and none had committed to gender equality at either board or cross-company level.
The bulk of the companies analyzed for the report were utilities with renewables generation assets – including Powerchina, which came rock bottom of the rankings with zero across the board – although the two North American investment funds also featured.
In terms of overall human rights performance, Jinko rated 7% against an average of 22% among the 16 companies analyzed. It was, however, the sixth best-ranked business in terms of renewable energy-specific human rights concerns – with a 10% rating – and won praise for joining Spanish renewables and infrastructure company Acciona in having a pure renewables generation portfolio.
“The average company score was 33%, on par with the high-risk industries scored by the [non-profit] Corporate Human Rights Benchmark – apparel, agricultural products, extractives, and ICT manufacturing – which score an average of 31%,” wrote the report’s authors.
Powerchina and BlackRock and Southern Group were identified in the study as having scored zero for demonstrating respect for human rights and incorporating such respect into company policy. BlackRock was at least highlighted as the only one of the 16 companies to commit to paying staff a living wage – although that courtesy was not extended to contractors or supply chain staff.
A BlackRock representative gave pv magazine a list of its sustainability policies and the following statement, which has also been printed on the website of the Business & Human Rights Resource Centre: “BlackRock believes human rights due diligence is a crucial component of responsible investing so it is disappointing that the Business & Human Rights Resource Centre failed to engage with us in compiling its report.
“The benchmark appears to consider asset operators and financial investors similarly, apparently ignoring their very different profiles. It also fails to acknowledge BlackRock’s many public commitments to upholding human rights standards across its business and investments. The renewable power strategies we run on behalf of our clients adhere to a number of publicly available, firm-wide policies which ensure the rights of our employees, partners, contractors and local communities are respected and upheld.”
Utilities
NextEra joined Jinko, BlackRock, Brookfield, Southern, CGN Power and Powerchina at the foot of the overall rankings, with scores of 0-7%.
German power companies E.on and RWE also performed below average, according to the report, with scores of 19% and 17%, respectively. A spokesperson for E.on told pv magazine the company had sold its renewables business to RWE and had advised the thinktank behind the report of that development but the authors had decided to go ahead and publish, “including completely false facts.” The spokesperson added, E.on updated its human rights policy statement in November and applies it across all parts of its business.
The report stated: “None of the companies analysed are currently fully meeting their responsibility to respect human rights, as defined by the UN guiding principles.”
Iberdrola led the way and was praised, along with state-backed Italian energy business Enel, for having taken steps to identify and mitigate supply chain risks in conflict countries. Iberdrola and Portuguese utility EDP have reported progress on closing the gender pay gap, the report noted, and Enel also offers benefit sharing to communities affected by its activities.
Gender pay gap
Acciona and Danish wind power and energy storage developer Ørsted won plaudits for conducting environmental impact and life cycle assessments for all their projects with the former having committed to a timetabled effort to reduce gender pay differences and with Ørsted, which also has a solar operation, having pledged a timed transition to an all-renewable generation portfolio.
A spokesperson for Iberdrola told pv magazine: “Our human rights policy is at the core of our business. It has been designed to respect international standards with the advice of independent experts and is constantly evolving. The policy was enhanced again in April 2020. External analysis is very important to us. This is a new benchmark and we were fully engaged with the researchers, actively collaborating during the drafting period. We will now review the findings of this sector report very carefully.”
An Ørsted representative said the company “is committed to respecting human rights in the transition from black to green energy. This is why we for several years have aligned our human rights work with the UN guiding principles on business and human rights. This includes identifying and mitigating the risks that are most significant or salient in our operations and supply chain and reporting on performance. As we expand our business to new markets, we will continue to adapt our human rights approach to ensure that it corresponds with the human rights risks that we face including, for instance, on indigenous people, when respect for their rights represents a salient issue.
“We value the work done to benchmark renewable energy companies for the first time and we look forward to applying insights from the analysis to further mature our human rights approach.”
A spokesman for Enel told pv magazine: “Enel values what its stakeholders report about the company as an opportunity for improvement. We welcome the findings of the Renewable Energy & Human Rights … report … which recognizes Enel as one of the top four performers among renewable companies globally, in terms of human rights policies, while identifying room for improvement when it comes to formal statements and reporting.
Priority
“For Enel, human rights are a priority in the company’s sustainable strategy and daily activities, as evidenced by the group’s human rights policy, released in 2013, among other things. Furthermore, Enel aims to create shared value for all its stakeholders, as is made clear by its business strategy, which is driven by the UN sustainable development goals.
“The human rights policy, approved by the boards of directors of all Enel Group companies, implements the United Nations’ ‘protect, respect, remedy’ framework. In addition, we perform due diligence both on the management system of human rights and on the relevant sites of operations as well as specific training for all our employees worldwide. Everything we do is reported transparently on our sustainability report …
“When it comes to the relations with indigenous communities and land rights, in our human rights policy we have a specific principle: ‘respect for community rights,’ that states as follows: ‘Enel is committed to respecting the rights of local communities and to contribute to their realization, also by means of promoting free and informed consultation activities. In this regard, Enel pays particular attention to the most vulnerable communities, such as tribal and indigenous peoples, including through the promotion of local development projects for the benefit of those communities’.”
pv magazine contacted all of the companies analyzed in the report, although an email sent to Powerchina was returned because of an overseas “policy violation or system error.”
Methodology
According to the Business & Human Rights Resource Centre, the benchmark was developed after a three-year global consultation process, comprising more than 100 stakeholders, seven in-person workshops or meetings and an online consultation process.
The methodology includes 13 core indicators, “developed, tried, and tested by the Corporate Human Rights Benchmark to measure companies’ alignment with the United Nations guiding principles on business and human rights.” A further 19, sector-specific indicators were developed to “assess salient human rights risks relevant to the renewable energy industry, including indigenous peoples’ rights, labor rights and land rights, based on international standards such as [UN body] the ILO [International Labor Organization] core conventions and OECD guidelines.”
The report’s authors added, each of the ranked companies was invited to participate in the methodology development process and were notified of their inclusion in the benchmark in December. The ranked companies were reportedly provided with an opportunity to respond to allegations in February, when their initial scores were shared and six did so, according to the Business & Human Rights Resource Centre. The final scores were said to have been shared with the companies in early March and an internal review process is reportedly available for those wishing to appeal.
* This article was amended on June 29, at 21.08 to include the report’s methodology and add further details of all companies involved in the investigation.
The article was further amended on 30/06/20 to include a response from Ørsted.
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