Allegations of forced labour deep within the global supply chains of key renewable energy products have become increasingly prevalent. This creates a potentially significant tension for ESG-active businesses to ensure that a sustainability-driven move to decarbonise does not occur in the context of unacceptably high supply-chain risks of modern slavery.
The move towards decarbonisation offers businesses economic rewards and is an increasingly prominent baseline expectation for companies that claim to be environmentally sustainable.
However, from a human rights perspective, businesses that invest in clean energy products such as solar panels, advanced technology batteries and wind turbines need to be conscious of, and actively address, significantly elevated modern slavery risks that can potentially be associated with these industries.
Responsible supply chain management is something that businesses should be applying across their entire procurement processes, not just in relation to renewable energy supply chains.
While the responsible adoption of renewable energy is a difficult task, it is also critically important.
A meaningful ESG strategy should consider not only the best approach for reducing a company’s environmental impact, but also associated areas of potential human rights risk. Unless a truly holistic approach is adopted, corporate decisions that are genuinely intended to address negative environmental impacts might also be inadvertently contributing to the incidence of modern slavery, or other human rights abuses.