How solar, wind and other renewable energy projects are implemented matters to local communities — and to investors, says a new report from Transform Finance, the Business & Human Rights Resource Centre and Sonen Capital.
As investments in renewable-energy projects have grown five-fold in 12 years, to $287 billion, so too have complaints of land grabs, displacement of indigenous peoples, violence and killings related to such projects. Infractions like these not only violate basic rights, they can also cause project delays, increase legal costs, and harm reputations — increasing operational and capital expenditures and reducing financial returns for investors.
Only five out of 50 wind and hydropower companies surveyed prior to the report recognized international standards for informed consent (and three of those five faced allegations of violating them).
Engagement with companies and communities before and during investments can mitigate risks, say the report’s authors. Such efforts will ensure “the transition to renewable energy truly benefits communities and does not create undue risk for investors,” said Anne Simpson, an investment director at CalPERS, the California public employee pension fund with $300 billion in assets.