Human Rights Due Diligence in the Just Energy Transition: A Legal Study of Finnish Renewable Energy Companies

Sammanfattning

The documented adverse effects of climate change have led to national and international efforts to reduce global carbon emissions during recent decades. Significant decarbonisation requires not only a reduction in the production and use of fossil fuels, but a transformation of the entire energy system itself, transitioning away from fossil fuels to renewable energy sources. This large-scale transition, a part of the overall green transition and consisting of multiple energy transitions globally, has significant social impacts – both beneficial and adverse. To illuminate and address the adverse social impacts of the green transition, the concept of a ‘just transition’ has emerged to ensure that no person is left behind in the process. One key actor with the ability and responsibility to address these adverse social impacts within energy transitions are businesses active within the renewable energy sector. Businesses have the corporate responsibility to respect human rights, which expects them to avoid infringing upon human rights by identifying, addressing, preventing and mitigating any (potential) adverse human rights impacts they are involved in through the process of human rights due diligence (HRDD). Renewable energy businesses are therefore in a key position to positively contribute to a just energy transition by performing HRDD. To understand the extent that renewable energy businesses are positively contributing to a just energy transition by performing HRDD, a case study is conducted on Finland – a country with a steadily growing energy transition. Employing a doctrinal and an empirical legal research method, this thesis seeks to illustrate the expectations of the United Nations Guiding Principles on Human Rights (UNGPs) on HRDD, the extent to which they are being met by Finnish renewable energy companies and what is required for said companies to positively contribute to a just energy transition by means of performing HRDD. This is done by examining the corporate responsibility to respect human rights under the UNGPs and HRDD, focusing on the identification, assessment and communication of (potential) adverse human rights impacts. This is followed by an empirical legal case study measuring the extent of Finnish renewable energy companies’ public disclosures on identifying, assessing and communicating their (potential) adverse human rights impacts and their alignment with UNGPs’ HRDD expectations. The empirical findings show that all examined Finnish renewable energy companies’ public disclosures on their HRDD processes were not fully aligned with their corporate responsibility to respect human rights under the UNGPs. Possible explanations for these gaps are presented, and the thesis concludes with suggested actions that can be undertaken by businesses, investors, the state, consumers and other actors in Finland to improve Finnish renewable energy companies’ ability to positively contribute to a just energy transition through HRDD.