Kirstine Lund Christiansen, Head of Sustainable Banking for SEB Denmark shares reflections on the role of human rights in the energy transition.  

For good reasons climate change and biodiversity loss are high on the agenda for many corporates and investors and in society as a whole. The term twin crisis is often used to demonstrate that the two are related, where, for example, climate change is leading to biodiversity loss. Additionally, one can raise the question of whether climate change and biodiversity loss are impacting human rights like the right to adequate food and the right to water.  

Potential human rights risks

The energy transition is one of the solutions to climate change, but it comes with numerous potential human rights risks. Given this relation between “the twins” and human rights I think it is fair to say that human rights can be considered a sibling or perhaps even a triplet to the twin crisis of climate change and biodiversity loss. 

To meet the targets of the Paris Agreement, we need to scale the energy transition. We need to do it in a way that avoids adverse impact on human rights. One example of potential human rights risks in the energy transition is that some of the essential inputs to, for instance, batteries and solar panels can have severe human rights risks in the value chains stemming from mining and production.

Additionally, large new infrastructure projects like wind farms can have potential adverse impacts on the local communities where the projects are established. Many corporates and investors already have solid management systems in place to identify and mitigate these potential risks.  

A green transition will also potentially affect workforces around the world, following a shift in demand on workforce regarding both geographical demand and demand in skills. This can be a human rights risk for some and be an opportunity for others. 

The presence of numerous human rights risks associated with the green transition does however not mean that we should stop the transition. There are also human rights risks associated with doing business as usual, and continuing with fossil energy production, contributing to the twin crisis.  

Transparency is key

Corporates and investors need to consider the potential human rights risks from the part of the transition where they are directly or indirectly involved. Furthermore, it is key for companies to be transparent about their considerations including how they prioritize between the risks and how they mitigate the risks. 

The wave of sustainability regulation entering into force in the EU in these years is overwhelming and can lead to an excessive focus on reporting instead of running business in an even more sustainable manner. To be honest, the new regulation excites me, since I think that implementation of EU regulation like the SFDR, Taxonomy, CSRD and CSDDD are great opportunities for corporates and investors to do a “check-up” on their sustainability strategy to ensure that they are focusing on what is material to them, and to strengthen their management systems if needed. When I in the coming years read materiality assessments in annual reports of corporates and investors, I will be looking to see how climate change, biodiversity loss and their sibling human rights is assessed.