Event Summary: The Role of the Business and Human Rights Lawyer in the Just Transition
On 26 January 2023, the Business and Human Rights Lawyers Association (BHRLA) held its first London event to discuss the role of business and human rights (BHR) and of commercial lawyers in the "Just Transition".
Roger Leese, Partner, Clifford Chance, led a panel discussion with Vanessa Havard-Williams, Partner and Global Head of Environment & Climate Change, Linklaters, Andrea Saldarriaga, Director, Social and Environmental Policy, Barclays, and Anna Triponel, Founder and Advisor, Human Level.
A video recording of the session will be available in due course. There follows a summary of the discussion and the panel's contributions.
Introduction
The Sharm El-Sheikh Implementation Plan agreed at COP 27 recognises that the urgent action required to address climate change by a transition to net zero must be just and inclusive, minimising negative social and economic impacts. The Plan emphasises that a "just and equitable transition encompasses pathways that include energy, socioeconomic, workforce and other dimensions". The newly minted Kunming-Montreal Global Biodiversity Framework expressly provides that its implementation "should follow a human rights-based approach".
Essential components of the approaches needed to ensure a just transition – stakeholder engagement, protection of the vulnerable, and a proactive understanding of how people's rights can be negatively impacted by state policies and business activities - are also reflected within the UN Guiding Principles on Business and Human Rights (UNGP).
The Just Transition: where are we?
Vanessa Havard-Williams began with a definitional exposition of the "just transition", referring to the Paris Agreement and relevant aspects of the Sustainable Development Goals (SDGs). She noted that a just transition will help economies adapt to meet the multifarious threats they face today. While the extractives industry has recognised the requirement for a "social licence to operate" for decades, all businesses across sectors now face serious economic and operational difficulties if surrounding communities do not agree with their business practices. Such resistance often cannot be solved with monetary settlements and instead requires the changing of hearts and minds to promote long-term solutions. At the core of delivering a just transition is obtaining social buy-in, through thinking about and acting to address the social impact on communities and the opportunities and risks involved for people.
Anna Triponel recounted the progress businesses have made over the last few years in deepening their understanding of how to integrate climate and social action. The concept of just transition has expanded in discussions in international fora – the focus has extended rapidly from coal to cobalt to agriculture and beyond. In parallel, its applicability is now understood to encompass not only workers but also communities and customers – and this has trickled down to businesses, compelling them to recognise its growing relevance. Although sentiment still varies, the direction of travel towards an appreciation of the business role in achieving a just transition is clear.
A framework for the Just Transition
On practical implementation, Andrea Saldariagga noted that one of the biggest hurdles is translating the abstract concept of a just transition to the real-world business context. Recalling how the UNGP introduced the "protect, respect and remedy" framework to encapsulate the discussion on business and human rights, she posited the three pillars of "risk, opportunity and engagement" within which to frame the business response to the just transition:
· Risk – understanding, anticipating and assessing the risks of adverse impacts on individuals and communities associated with the activities required to achieve the transition to net zero
· Opportunity – identifying and enabling the opportunities that the transition to net zero can bring for individuals and communities
· Engagement – ensuring meaningful dialogue with stakeholders who will be impacted by the identified risks and opportunities
The "risk, opportunity and engagement" pillars draw on existing frameworks that businesses already employ when implementing their sustainable strategies.
The UNGPs provide a tool for assessing risks of impacts on people; the notion of opportunities meanwhile links to the SDG objectives; and the Aarhus Convention deals with issues relating to engagement.
The three pillars should be seen as working in tandem, with speakers warning against the dangers of cherry-picking "easy wins" within one pillar without reference to the others. As such, the UNGP risk (adverse impact) framework should be used as part of the methodology to arrive at the appropriate just transition outcomes. These outcomes can then be pursued by inviting the engagement of different stakeholders – notably, the most successful just transition strategies have been borne of such "co-creation".
On the topic of biodiversity, the speakers noted that companies' transition plans should account for the material interdependencies between climate action, nature and biodiversity, and the rights and interests of stakeholders such as the workforce, supply chains, communities, and consumers. The third version of the Taskforce on Nature-related Financial Disclosures (TNFD) framework discusses the relevance of the "social" aspect to nature and biodiversity, and the TNFD have been engaging with key stakeholders in the biodiversity space such as indigenous peoples. The next iteration will better integrate the social aspect and consider the relevance of the UNGPs and OECD Guidelines for Multinational Enterprises, again highlighting the value of building on existing frameworks to address these challenges.
The role of lawyers
On challenges facing companies, speakers highlighted the pressures on businesses including the demand on resources and new areas of knowledge required to keep up with the pace of change. Lawyers have a role in helping their corporate clients overcome these challenges.
On external communication, whilst corporates might wish to emphasise aspirational goals within their just transition messaging, lawyers are attuned to the risks associated with this if claims are not justifiable. Processes and governance can help to cement the needed alignment between messaging and actions. The coherent use of available guidance and frameworks to structure and articulate goals and thinking can be useful in this regard. On internal communication, companies tend to have built structural silos not easily adapted to integrating environment and social risk and opportunity management which the just transition calls for. Lawyers can help their clients find themes of integration in the language of existing guidelines and rules to bridge gaps where clients seek to address these factors holistically.
This tension between a corporate's desired external messaging and legal risk was reiterated in the Q&A session. Just transition policies can involve companies going beyond any legal obligations in their efforts to address adverse impacts and secure positive outcomes. Lawyers must be equipped to help clients navigate relevant boundaries, using legal tools when appropriate to meet their objectives, yet appreciating any aspects of their strategies that may expose them to legal risk. In this regard, a basic understanding of business and human rights frameworks is necessary for lawyers to help businesses execute their strategies consistently with the results they desire.
This then begs the question of building the expertise and knowledge base within the legal industry to achieve this, which alludes to the final theme touched on in the Q&A session – that of collaboration. The just transition cannot be delivered through isolated efforts, but through the efforts of all stakeholders ranging from corporates to governments. To get to this point, the appropriate expertise within the legal industry needs to be built – BHR is something that pervades all industries, and lawyers within different sectors should be aware of the key BHR issues within their own practice areas. Whilst the BHRLA, at its core, aims to widen and deepen knowledge about BHR and to ensure that respect for human rights is recognised as a baseline within commercial legal practice, it also endeavours to be a platform for collaboration, reaching beyond law firms to bring in other actors and stakeholders in its knowledge-sharing and capacity-building efforts.