Matthew Welch on the UN Business and Human Rights Forum

By Matthew Welch, Responsible Investment Specialist at Degroof Petercam Asset Management (DPAM)

DPAM took part in a breakfast investor roundtable on just energy transition, organised as a side-event to the UN Forum, by Swedwatch, a non-profit research organisation dedicated to empowering rights holders and promoting responsible business practices. This session brought together institutional investors, human rights experts, and representatives of Indigenous communities to explore the critical role a rights-based approach must play in the global push for decarbonisation.

The complexities of decarbonisation:

The race to decarbonise the global economy demands an unprecedented expansion of renewable energy projects. Solar farms, wind turbines, and electric batteries all depend on the large-scale extraction of transition minerals such as copper, lithium, and cobalt. These materials form the backbone of a greener future. Yet, while the urgency of combating climate change necessitates rapid development, the projects underpinning this transition are often fraught with controversy.

Delays stemming from inadequate consultation or outright resistance are far from rare. Litigation brought by affected stakeholders results in financial and operational setbacks for businesses and erodes trust in companies vital for the transition. The case of La Guajira, a region in Colombia rich in wind energy potential but plagued by conflicts with Indigenous communities, is a stark reminder of what can go wrong when rights are overlooked. There are plenty of other examples across the renewables value chain.

Rights-based solutions: from principles to practice:

A rights-based approach is no panacea, but it offers a framework for companies to identify and mitigate potential human rights infringements. The European Network of National Human Rights Institutions outlines five foundational principles:

• Participation: Communities must be actively involved in decisions that affect their rights.
• Accountability: Mechanisms must exist to hold companies accountable when violations occur, with effective remedies available.
• Non-Discrimination: Human rights must apply equally to all, without prejudice.
• Empowerment: Communities need access to information and the ability to claim their rights.
• Legality: All actions must adhere to international and domestic legal standards.

These principles are supported by the UN Declaration on the Rights of Indigenous Peoples, which stresses the importance of free, prior, and informed consent (FPIC). Engaging proactively with Indigenous groups and ensuring their voices are heard can help pre-empt disputes and foster cooperation.

Investors’ role in driving change and collaboration as the path forward

For institutional investors, the stakes are equally high. They hold countless companies in their portfolios, operating across the renewable energy value chain and bear the responsibility of ensuring these companies respect human rights. Policies and processes, while easy to draft, are far harder to implement effectively—particularly across sprawling, multinational operations of a very broad set of companies.  To bridge this gap, institutional investors must rely on a combination of tools: data from providers, input from civil society, and their own due diligence. Yet even the most rigorous processes require support from on-the-ground organisations. NGOs like ‘Indigenous Peoples’ Rights International’ play a pivotal role in reducing information asymmetry and ensuring that rights violations are identified and addressed.

The broad scope of institutional investment portfolios presents another challenge. Unlike project financiers, who focus on specific initiatives, institutional investors must evaluate a diverse array of companies, making granular project-level oversight across a company’s value chain nearly impossible. This underscores the need for collaboration—among investors, civil society, and other stakeholders. Organisations like the Investor Alliance for Human Rights act as a unifying force, bringing together diverse stakeholders to address human rights issues affecting multiple industries. Similarly, the Advance initiative by PRI exemplifies this collaborative approach, focusing on specific industries and enabling investors to pool their resources to encourage companies to improve a broad range of human rights issues associated with those industries.

The roundtable at the UN Forum provided a unique opportunity for face to face and open dialogue with Indigenous Peoples and other stakeholders. Together we exchanged honest views to brainstorm together paths forward to achieve this just transition acknowledging limitations and constraints but feeling energized that we all want to work towards a common goal.  I appreciated this opportunity as the first of many such exchanges to come as we need to find ways to sustain constructive and ongoing dialogue.

By working together, these groups can pool resources, share insights, and create the pressure needed to enforce meaningful change. Transparency and accountability must become more than buzzwords; they must form the bedrock of a sustainable and equitable energy transition.

As the world races toward decarbonisation, the stakes could not be higher. Addressing climate change is a moral imperative but so is ensuring that the transition to a greener future does not come at the expense of the most vulnerable populations. The challenge is immense, but the solution is clear: a commitment to human rights must be at the heart of every effort to build a sustainable future.