By Federico Burlon, Deputy Director for Business Engagement, and Brianna Peterson, Senior Advisor.
It is more important than ever for businesses to pay close attention to the links between climate change and human rights.
Global emissions continue to rise and the impacts are already being felt globally. Without urgent action to limit warming, major tipping points could be passed, leading to irreversible consequences for nature and societies, hitting those most at risk the hardest. A warmer world will also create tremendous financial and operational risks for business. Action to limit warming to the globally agreed limit of 1.5°C, therefore, is not an aspirational target – it is a scientific, societal, and business imperative.
Over the last two weeks, the world’s attention has rightly been on the global climate negotiations taking place in Baku. While more ambitious government action is essential, it alone will not be sufficient to avoid the most severe impacts of climate change. Bold and decisive action from businesses around the world is equally necessary to drive the change needed.
How businesses approach this action—and who stands to be most impacted by their decisions—is a critical question for every company to consider. For Shift, the answer is clear: we will only have succeeded if the transition to a low carbon future happens in a way that reduces inequality and respects and upholds people’s human rights. That is the only way to ensure a sustainable future that protects both people and the planet.
Action to build a fair and inclusive society where everyone has enough to provide for themselves and their families, engage in their communities, and exercise their rights is a necessary precondition for the transition to a low carbon, equitable, and climate-resilient future. A climate transition that disregards people’s dignity or exacerbates existing inequalities will face significant implementation challenges and risks being unsustainable in the long term. In other words, for the transition to be both effective and lasting, it must be equitable.
To play the role they should in tackling inequality, companies must embed respect for human rights across their operations. It’s through effective human rights due diligence processes and systems to enable remedy for harms that companies can reduce inequality. And, in so doing, they will strengthen the impact of their climate action, both now and into the future.
The link between human rights and climate action was made clear recently by the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD). The Directive introduces an obligation for companies to “adopt and put into effect” a climate transition plan that is aligned with the Paris Agreement goal to limit average global temperature rise to 1.5°C. And because of the core due diligence duty in the Directive, it follows that these plans should include human rights impacts connected to a company’s climate mitigation and adaptation activities.
Over the past couple of years, Shift has worked with companies and financial institutions to integrate a human rights perspective into transition planning and climate action. In doing so, we are guided by the UN Guiding Principles on Business and Human Rights (UNGPs). The UNGPs not only established the responsibility of all companies to respect human rights as an international standard and set the foundation for the new EU due diligence law, but they also offer a vital framework for businesses to pursue people-centered climate action—ensuring that their efforts are not only effective but also fair, inclusive, and equitable.
Our work has demonstrated that embedding the core principles of human rights due diligence into climate action enables businesses to effectively identify, prevent, mitigate, and remediate harms to both people and planet. And while there are many ways in which applying a human rights lens can help, there are three that stand out as clear reasons why Shift will continue to push for human rights to be a core consideration in climate transition plans.
First, the UNGPs help companies to identify and prioritize human rights impacts related to their climate action. The UNGPs expect companies to adopt a principled approach to prioritization, based on severity of impact – as opposed to an approach based, for example, on what it is easiest to address, or on what the company perceives as the most important impact from the perspective of the business.
Second, a UNGP approach expects companies to meaningfully engage with stakeholders, especially the people and communities most affected by their climate action. The UNGPs recognize that stakeholder engagement is not only a moral imperative, but also a practical tool for better decision-making and more effective risk management. It will help companies anticipate potential risk, build stronger community relations, and ultimately take lasting climate action. Engaging the right stakeholders at the right time is crucial to minimizing operational, reputational, legal, and financial risks, while ensuring that actions taken are both sustainable and impactful.
Third, applying a UNGP lens to climate action will create an opportunity to break down silos between different departments within a company, including bringing together the teams that lead on climate action with human rights practitioners, legal, compliance and procurement, among others. This cross-company approach can often lead to better business outcomes that recognize and account for the different interrelated aspects of successfully implementing decarbonization and adaptation actions.
As another year of climate negotiations comes to an end, there is still a huge amount of work that needs to be done. Our likely future still lies well beyond thresholds considered “safe”. The international scientific consensus says that to have any chance of keeping global average temperatures increase below 1.5 degrees then global emissions of carbon dioxide need to fall by about 45 percent from 2010 levels by 2030, reaching net zero around 2050. This will require companies to make bold decisions—big and small—every single day. To be successful, these decisions must integrate respect for human rights. The UNGPs provide a blueprint for getting these decisions right, ensuring they respect the rights of all people.