As the need to transition from fossil fuels to green energy becomes increasingly urgent given the escalating climate crisis, investments in the solar power and electric vehicles sectors are surging. However, these sectors are known to be heavily exposed to forced labour risks given the Uyghur Region’s dominance in green technology material supply and production. The new research includes guidance for investors to mitigate these risks, as well as a policy brief to the UK Government to address the concerns through legislative and regulatory action. This project is funded by the Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC), which in turn is funded and actively supported by the UK Arts and Humanities Research Council (AHRC).
For years, the Uyghur Region in northwest China has served as the predominant hub for the quarrying, processing, refining, manufacturing, and/or export of materials and components for solar and EV supply chains. At issue is the Chinese Government’s systematic persecution of Uyghur and other Turkic and Muslim-majority peoples on the basis of their religion and ethnicity. This persecution utilises multiple systems of state-imposed forced labour, tainting any materials sourced or produced in the Region with salient human rights risks. In 2022, the UN Special Rapporteur on Contemporary Forms of Slavery found that this forced labour “may amount to enslavement as a crime against humanity.”
Through one-on-one interviews with investment professionals, researchers sought to understand how investors have responded to Uyghur forced labour risks in their portfolios. Through this research, the authors compiled ‘Investor Guidance’, designed to provide investment professionals with the tools to identify, exclude or engage businesses linked to human rights violations against the Uyghur people from their green energy portfolios. The Guidance also explores how investors can re-channel investments into companies that champion sustainability, innovation, and supply chain resilience and outlines policy measures governments can take to facilitate those investments.
“Given the Chinese government’s direct involvement in these human rights abuses, investors in green energy sourcing from the Uyghur Region face heightened risks and reduced options” said Anita Dorett of the Investor Alliance for Human Rights. “The inability to conduct human rights due diligence on the ground, the impossibility of direct remediation, and the absence of investor leverage will necessitate divestment from any supplier operating in the Uyghur Region.”
Green technology processing in the Uyghur Region is also heavily reliant on coal-generated electricity, and, according to the International Energy Agency, this is key to the ‘cost-competitiveness’ of the Uyghur Region’s solar industry. In addition to the risk of human rights abuses, the groups argue that this puts the solar industry at risk of greenwashing, and potentially delays the urgent move to net zero.
The research further found that investor and corporate actions to remove the threat of direct or indirect complicity in Uyghur forced labour are stymied by a lack of coordinated international governmental collaboration. The policy briefing urges swift, decisive, and coordinated action from governments to scale up and support the growth of alternative green technology supply chains. To enable a truly just transition, civil society, trade unions, and indigenous peoples must be involved in decision-making on diversifying supply chains.
“Investors and governments provide the key capital to enable our urgent transition away from fossil fuels” added Chloe Cranston, Head of Thematic Advocacy Programmes at Anti-Slavery International. “However, they must not simply accept the transition’s current reliance on systemic persecution of a population, as is the case with Uyghur forced labour. This guidance should serve as a tool to encourage investors and the UK government to provide the critical funding and investment needed to shift green technology supply chains from the Uyghur Region, and support a truly just, fair, and equitable transition from fossil fuels.”
Key findings include:
Investors’ attempts at due diligence and responsible stewardship on the issue of Uyghur forced labour are stymied by the restrictive legal and political environment in China.
Investment professionals have a limited understanding of how the distinctive context of state-imposed forced labour in the Uyghur Region, compared to most other contexts of forced labour, necessitates alternative approaches to risk management.
Governments have not introduced sufficient financial incentives and regulatory measures to facilitate the development of renewable energy markets outside of the Uyghur Region.
China’s dominance of green technology supply chains and a perceived lack of emerging alternatives has bred fatalism within both the business and investor ecosystem.
“Despite growing global scrutiny on solar and electric vehicle supply chains, Hallam research has found that many of the industries’ biggest players remain exposed to egregious forced labour practices in the Uyghur Region” said Caroline Dale, representative for Helena Kennedy Centre for International Justice at Sheffield Hallam University (Hallam). “Without definitive action from investors and policymakers, the clean energy transition is at risk of becoming inextricably linked to the persecution of the Uyghur people. This guidance provides stakeholders with practical tools to uncover hidden risks within their portfolios and redirect investment into corporations which champion the protection of human rights and sustainability.”
Anti-Slavery International is the world’s oldest human rights campaign, founded in 1839. It exists to challenge contemporary forms of slavery wherever they exist by tackling modern slavery’s root causes. Working in partnership with survivors, experts and its members, Anti-Slavery International manages projects in countries worldwide to help communities to understand and eliminate the causes and adverse effects of modern slavery, through legislative change, research and advocacy.
The Helena Kennedy Centre for International Justice at Sheffield Hallam University is a leading centre for social justice and human rights research, practice, and pedagogy. It provides a vibrant environment at the cutting edge of legal and criminal justice practice which prepares students for excellence in their chosen professional careers. The centre is home to a range of social justice and human rights activities that include research, global engagement, impact on policy, professional training, and advocacy. Its central values are those of widening access to justice and education, the promotion of human rights, ethics in legal practice, equality and a respect for human dignity in overcoming social injustice. The centre works on high-profile projects in a variety of human rights and social justice areas.
The Investor Alliance for Human Rights is a collective action platform for responsible investment that is grounded in respect for people’s fundamental rights. The Investor Alliance’s over 220 members include asset management firms, public pension funds, trade union funds, faith-based institutions, and endowments. Collectively, members represent over US$14T in assets under management and 19 countries. Along with civil society allies, the Investor Alliance equips investors with tools, expertise and opportunities to invest responsibly and put human rights due diligence into practice to address and avoid risk to both investments and the individuals and communities adversely impacted. The Investor Alliance is an initiative of the Interfaith Center on Corporate Responsibility.
This project is funded and supported by the Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC). The Modern Slavery PEC is funded and actively supported by the UK Arts and Humanities Research Council (AHRC) on behalf of UK Research and Innovation (UKRI), from the Strategic Priorities Fund. Read more about the Modern Slavery PEC at www.modernslaverypec.org. The views expressed in the outputs developed by this research project are those of the authors and not necessarily of the Modern Slavery and Human Rights Policy and Evidence Centre or the Arts and Humanities Research Council.
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