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Businesses in all sectors must increasingly ensure their climate strategies include a robust assessment of risks posed to human rights

Businesses worldwide face rising scrutiny focused on their human rights responsibilities in connection with climate change. Alongside the use of human rights arguments by claimants in climate change litigation, businesses face a growing number of climate-related complaints directed against them through non-judicial human rights mechanisms. Recent developments, including the adoption of the revised OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (the OECD Guidelines), look likely to accelerate this trend.

This article explains how business conduct relating to climate change is increasingly treated as interlinked with the corporate responsibility to respect human rights. It goes on to discuss climate-related human rights complaints which have been brought against businesses through OECD National Contact Points (NCPs), UN special procedures and national human rights institutions (NHRIs).

Assessing climate change impacts through human rights due diligence

The recognition of climate change as a human rights issue has continued to grow in prominence internationally. A request for an advisory opinion on state obligations in relation to climate change, including in respect of "peoples and individuals of the present and future generations", is currently before the International Court of Justice. Meanwhile, advisory proceedings regarding climate change are also pending before the Inter-American Court of Human Rights (see our previous posts here and here). Furthermore, the European Court of Human Rights' Grand Chamber has three climate cases before it, against Switzerland, France and Portugal.

While primarily focused on state obligations, notable pronouncements from any of these courts could influence regulatory expectations regarding responsible business conduct in the context of climate change. Indeed, climate considerations are already influencing the development of international standards relating to the human rights responsibilities of businesses.

A prominent example are the OECD Guidelines, a highly influential soft law standard. Like the UN Guiding Principles on Business and Human Rights (the UNGPs), the OECD Guidelines recommend businesses conduct human rights due diligence (HRDD), which entails the assessment and monitoring of the adverse human rights impacts an enterprise may be causing, contributing to, or directly linked with via a business relationship. The OECD Guidelines additionally recommend that due diligence processes incorporate stakeholder engagement, as well as the communication of responsible business conduct information, including relevant plans and policies.

This model of risk-based due diligence is also applied by the OECD Guidelines to adverse environmental impacts, a concept which, following the revisions adopted in June 2023, now expressly includes climate change (see our previous post here). At the same time, the UN Working Group on Business and Human Rights published a June 2023 Information Note on climate change (available here), which states that businesses should "integrate climate change considerations in all aspects of the human rights due diligence process throughout their operations".

A similar approach to HRDD and environmental due diligence is expected to be made mandatory for large companies doing business in the EU under the proposed Corporate Sustainability Due Diligence Directive (CS3D), the text of which was recently agreed by the European Commission and European Parliament on a provisional basis (see our previous post here).

Climate-related human rights complaints: OECD and UN mechanisms

Both the OECD Guidelines and the UNGPs have been relied on in a range of climate-related human rights complaints against businesses. A review of these complaints, brought through OECD NCPs and UN special procedures, highlights that HRDD taking account of climate-related human rights impacts is likely to become increasingly important for businesses.

OECD NCPs

Established by the OECD Guidelines' 51 adhering governments, NCPs are emerging as a significant mechanism for climate-related human rights complaints against businesses.

According to a database maintained by the OECD Watch non-governmental organisation, NCPs worldwide have received 15 complaints to date concerning climate change. Of these, six (40%) were filed since 2021, relating to:

  • alleged greenwashing (one complaint);
  • the adequacy of an energy sector business' decarbonisation efforts (one complaint);
  • livestock farming practices (two complaints); and
  • deforestation and indigenous rights issues (two complaints).

NCPs receive complaints from affected individuals or communities regarding business compliance with the OECD Guidelines. While an NCP decision that a business has not complied with the OECD Guidelines has no direct legal consequences, such a finding can have significant reputational consequences for a business. A finding of non-compliance may also have indirect legal consequences because of the OECD Guidelines (and other similar responsible business conduct or sustainability standards) being referenced in commercial contracts and being potentially relevant to the scope of other legal obligations, including directors' duties, corporate reporting and domestic tort law.

UN special procedures

Climate-related complaints have also been considered by UN special procedures mandate holders, independent human rights experts who work under UN Human Rights Council mandates. A special procedures mandate dedicated to climate change was established in March 2022, held by the UN Special Rapporteur on Climate Change and Human Rights (the Special Rapporteur).

The Special Rapporteur can receive human rights complaints made against states, international organisations or private actors. Following the receipt of a complaint, the Special Rapporteur can send a non-binding communication to the respondent entity requesting further information on the allegations made against it. The communication may also request that the respondent entity ceases its involvement with, or otherwise addresses, adverse human rights impacts.

The Special Rapporteur is not bound by a rigid standard of proof when deciding which complaints are suitable for communications. As set out in the special procedures Code of Conduct, the Special Rapporteur need only ensure that complaints are not "manifestly unfounded or politically motivated", are not based exclusively on mass media reports, and are submitted by complainants "claiming to have direct or reliable knowledge" of human rights violations. To date, the Special Rapporteur has issued 20 communications directed to businesses.

Emerging trends

A review of the climate-related human rights complaints against businesses which have been brought to OECD NCPs and the Special Rapporteur reveals two trends.

First, complaints commonly call into question the adequacy of business' HRDD processes. Of the six OECD NCP complaints highlighted above, the adequacy of HRDD was directly at issue in all complaints aside from the one concerning alleged greenwashing. Moreover, although the precise formulation of each complaint varied, all of them alleged failures to comply with recommendations in the OECD Guidelines related to the sufficiency or quality of responsible business conduct disclosures, which the OECD Guidelines recognise to be "part of [the] responsibility to carry out due diligence".

A similar approach was taken in a set of 2023 communications issued by the Special Rapporteur and other special procedures mandate holders addressed to a number of banks and in relation to oil and gas financing. The communications made the express request that the banks provide information on how they ensure they respect human rights in the context of financing the oil and gas sector, including through HRDD encompassing climate-related impacts.

Second, complaints are being brought both in relation to alleged business involvement in adverse human rights impacts resulting directly from the effects of climate change, as well as in relation to business activities undertaken as part of the energy transition.

The deforestation and indigenous rights issues raised in two of the OECD NCP complaints referenced above are cases in point. Such issues can arise in the context of large-scale renewable energy projects, or from mining activities focused on minerals critical to the energy transition. While not framed as a climate-related complaint, one of the first NCP complaints on the OECD Watch database brought in 2023 under the revised OECD Guidelines concerns the alleged impacts of a renewable energy project on indigenous rights.

National human rights institutions

The observations above are also applicable to the approach of NHRIs to climate-related human rights complaints. While an exhaustive survey is beyond the scope of this post, recent NHRI activities show that the adequacy of HRDD and risks relevant to the energy transition remain salient.

  • In its 2022 "Carbon Majors" Inquiry report, the Philippines Commission on Human Rights expressly references human rights due diligence responsibilities under the OECD Guidelines and the UNGPs.
  • The Canadian Ombudsperson for Responsible Enterprise (CORE), established in 2019, is mandated to hear complaints against Canadian companies with operations outside of Canada in the garment, mining, or oil and gas sectors. CORE's most recent report on received complaints (available here) notes that from 1 July – 30 September 2023, two new complaints were received concerning mining operations. One alleged forced displacement, while the other alleged infringements of the right to a clean, healthy and sustainable environment.

More generally, the capacity of NHRIs to address climate change issues continues to be strengthened. In October 2023, the Australian Capital Territory (ACT) Government introduced a bill to amend the ACT Human Rights Act to expressly recognise the right to a clean, healthy and sustainable environment. It also empowered the ACT Human Rights Commission to receive complaints regarding the breach of the right by public authorities (see our previous blog post here).

Conclusion

It is increasingly important for businesses in all sectors to ensure their climate strategies are informed by a robust assessment of the risks their activities pose to human rights, and to communicate this transparently. Carrying out effective HRDD will be increasingly important to mitigate the risk of climate-related complaints and litigation.

As well as being required under international standards such as the UNGPs and OECD Guidelines, HRDD has been made mandatory in a number of jurisdictions and is likely to be mandated for large businesses in the EU under the provisionally agreed CS3D.  Increasingly, ESG and sustainability reporting obligations and standards also require businesses to disclose details of their HRDD. A failure to consider climate-related human rights impacts is likely to attract scrutiny.

 

Antony Crockett photo

Antony Crockett

Partner, Hong Kong

Antony Crockett
Jefferi Hamzah Sendut photo

Jefferi Hamzah Sendut

Associate, London

Jefferi Hamzah Sendut

Key contacts

Antony Crockett photo

Antony Crockett

Partner, Hong Kong

Antony Crockett
Jefferi Hamzah Sendut photo

Jefferi Hamzah Sendut

Associate, London

Jefferi Hamzah Sendut
Antony Crockett Jefferi Hamzah Sendut