Climate change is the biggest crisis facing the world—and we know that a rapid overhaul of our global energy systems is crucial to containing it. Massive investment into green energy technologies is already well underway, putting the private sector at the heart of this global energy transition.

But the rapid shift to clean energy can only happen at the speed and scale required if it is rights-respecting and centred on shared prosperity for people affected by projects linked to the energy transition. If companies and investors do not carry out projects in a rights-respecting manner, they will encounter growing resistance from communities and be exposed to legal risks.

Data gathered by the Business & Human Rights Resource Centre has revealed a rising trend of lawsuits against renewable energy and transition mineral mining firms for systemic human rights abuses.

Since 2009, more than 90 legal cases have been launched around the world by Indigenous Peoples, other frontline communities and workers directly impacted by human rights harms associated with the rapid growth of the renewable energy value chain.

Failure to consult

In 65% of lawsuits documented since 2009, the plaintiffs asked for the project to be temporarily or permanently stopped as a consequence of alleged human rights and environmental abuses, particularly where firms have failed to properly consult hosting communities.

This raises serious concerns, with the rising number of legal challenges making it clear that egregious disregard for the human rights of host and frontline communities not only exposes companies and investors to legal and financial risks—especially when court decisions rule to stop or dismantle the project—but is also likely to derail the much-needed clean energy transition.

These rights holders seeking to vindicate their rights are not looking to slow or stop the transition—they are often the communities that need arrest of the climate crisis most—but they are demanding that the transition is implemented in a rights-respecting manner, and does not replicate harms of past energy models and their supply chains.

Over 70% of these cases have been filed since 2018, highlighting an uptick in this type of litigation as the energy transition has picked up steam—and indicating that this will become an increasing issue for companies and their investors and boards.

So, what should companies be doing?

First, all companies must undertake robust human rights and environmental due diligence along their full value chains. This will ensure they are able to identify and mitigate abuses and resistance to the best of their ability before it takes place. Where they fall short, companies must provide access to remedy through established grievance mechanisms.

Second, companies must ensure they have adequate procedures in place to enter fair negotiations with rights holders of their projects—particularly those who might be at heightened risk of vulnerability or marginalisation.

This must be done prior to investment decisions and continue throughout the lifecycle of the project—including through operational closure.

It is also particularly important that companies adopt and implement policies committing to respecting Indigenous Peoples’ rights—regardless of whether national regulations require it. Almost half (47%) of the lawsuits documented were filed by Indigenous Peoples, alleging violations of their right to free, prior and informed consent, among others.

This is not surprising, as 50% of the known transition minerals reserves globally are on Indigenous Peoples’ lands, highlighting the material risk of conflict for mining companies where rights are not respected.

Companies must see rights holders not as obstacles, but as essential partners in the energy transition—which must be fair also in order to be fast. If they continue to ignore their voices, they risk slowing progress at project level as conflict grows, alongside their own legal risks.

Companies would do well to prioritise project design that meaningfully includes and empowers Indigenous Peoples, frontline communities, workers and unions—building support from the very start of a project life cycle. This includes business models grounded in real commitments to shared prosperity with rights holders themselves.

Models that centre approaches like co-management, ownership and cooperation, and are adapted to local priorities and needs, represent best practice.

Businesses have the means to help deliver a fast energy transition—and one that is in partnership with communities and workers, rather than one riddled by conflict. The energy transition can succeed for the planet and people, as well as the private sector, but only if companies and investors take responsibility for getting it done the right and just way.

Rights-respecting business provides a solid foundation for a just energy transition: in other words, one that is built on a strong commitment to human rights, fair negotiations and shared prosperity.

Elodie Aba is senior legal researcher at the Business & Human Rights Resource Centre.