In a new development in the conversations with the European Commission, a coalition of NGOs and trade unions are today urging the body to go further in addressing a worrying lack of consideration for human rights in its plan for sustainable finance in Europe.
Responding to a letter from Valdis Dombrovskis, over a dozen pressure groups, including ShareAction, the responsible investment organisation, are sending a joint letter asking the Vice-President of the Commission to take stronger measures to ensure that human rights don’t take a back seat in the pursuit of green investments.
The Commission’s plan to engineer a financial system that helps prevent irremediable climate change is ambitious, say campaigners. However, in its attempt to define what constitutes green investments and activities that keep temperatures rises to below two degrees, Commission finance experts fail to consider the impact of such activities on human lives.
As one of many examples, biofuel projects, a climate mitigation activity, have been linked to adverse impacts on communities through negative effects on food security, gender equality and women’s rights.
The Commission has agreed to take a climate-first approach to sustainable finance, focusing on defining what ‘green’ means, and thinking about social risks later down the line.
In his letter, dated May, Dombrovskis seeks to address the issue by developing so-called “social safeguards” related to labour rights, such as forced and child labour. This provision would, in theory, ensure that any environmentally-friendly activity under the EU’s proposed labels for sustainable activities (called the ‘taxonomy’) would not negatively contribute to the violation of labour rights.
However, the signatories of today’s letter believe that the current provision is unclear and risks being ineffective without formal and consistent consultation with human rights experts. To reinforce this, the group is calling on the Commission to appoint human rights experts to its technical expert group on sustainable finance. Secondly, there are important human rights risks that fall outside of the Commission’s current consideration of safeguards for labour rights. The signatories are urging the body to refer to additional human rights legislation such as the EU Charter for Fundamental Rights as it develops ways of protecting human rights while tackling climate change.
Bethan Livesey, Head of Policy at ShareAction, says: “Europe is well on its way to becoming a world leader in setting the regulatory framework needed to incentivise massive shifts of money towards investments that benefit the planet and all its inhabitants. But if it’s not careful, it could slip up if it doesn’t address the S and E of ESG (environmental, social, and governance risks) simultaneously to ensure that vulnerable communities don’t suffer at the expense of projects that are meant to improve their environment.”
Notes to editors:
• For more information please contact Beau O’Sullivan on firstname.lastname@example.org or 07950 299 491
• Click here to see the NGOs’ letter
•Signatories to the letters include: ShareAction, Both ENDS, the Business and Human Rights Resource Centre, Carbon Market Watch, Clean Clothes Campaign, the European Coalition for Corporate Justice, the International Federation for Human Rights (FIDH), Financité, Frank Bold, Germanwatch, Global CSR, Global Witness, the Nordic Financial Unions, and Shift. The letter will be sent to Commission President Jean-Claude Juncker, Vice-President Dombrovskis, Vice-President Katainen, Olivier Guersent (Director-General for Financial Stability, Financial Services and Capital Markets Union- DG FISMA) and Martin Spolc (Head of Unit, Capital Markets Union- DG FISMA).
• The letter was written in response to a letter received by Vice-President Valdis Dombrovskis in May 2018, in which he responded to key concerns outlined in a previous communication by over 20 civil society organisations, trade unions and human rights experts.
• Additional human rights legislation that the signatories are asking the Commission to take into account include the International Bill of Human Rights and the UN Guiding Principles for Human Rights.
• ShareAction is a campaigning organisation with a mission to turn the investment system into one that truly serves savers, communities, and protects our environment for the long term.