Corporate Responsibility: Promoting Climate Justice Through the Divestment of Fossil Fuels and Socially Responsible Investment

• Author: Josephine M. Balzac
• Pages: 125-148

125

Corporate Responsibility:

Promoting Climate Justice

Through the Divestment

of Fossil Fuels and Socially

Responsible Investment

Josephine Balzac

Introduction .................................................................................................125

I. e Fossil Fuel Divestment Movement .................................................128

A. Moral Dimensions of the Fossil Fuel Divestment Movement ..........130

B. College Campus Future Generations Lead Divestment

Campaigns .....................................................................................131

C. Fossil Fuel Divestment Litigation ................................................... 134

II. Corporate Social Responsibility and Responsible Investment ...............137

A. Corporate Social Responsibility Reporting and Disclosures ............140

B. International Voluntary ESG and CSR Initiatives ...........................142

C. Opportunities for Responsible Investment ......................................144

1. United Nations Principles for Responsible Investment .............. 144

2. Shareholder Resolutions ............................................................ 145

3. Equator Principles ESG Guidelines for Financial Institutions ...146

Conclusion ................................................................................................... 147

Introduction

People of conscience need to break thei r ties . . . it makes no sense

to invest in companies th at undermine our future.

—Desmond Tutu

e perpetuation of business as usual in the climate change era endangers

the future of human existence and, consequently, imperils the rea lization

Chapter 5

126 Climate Justice

of human rights.1 e recent signing and adoption of the Paris Agreement

signies a global consensus that climate change is an urgent threat and com-

mon concern of humankind that needs ambitious mitigation and adaptation

eorts to solve the problem.2 e Agreement requires holding the increase in

global temperature to well below 2°C while pursuing eorts to limit the tem-

perature increase to 1.5°C above pre-industrial levels.3 e Paris Agreement is

undergirded by principles of equity, common but dierentiated responsibili-

ties, sustainable development, and poverty eradication.4

Protecting the environment and erad icating poverty are a n “ind ispens-

able requirement and integral part of achieving susta inable development.”5

Sustainable development incorporates three components: environmenta l

protection, social development, and economic development. On January

1, 2016, the 17 Sustainable Development Goals of the 2030 Agenda for

Sustainable Development ocial ly became eective.6 e goals include

women’s rights, eradicat ing poverty, cli mate action, food security, environ-

mental protection, health, education, equality, a nd job opportunities.7 e

Sustainable Development Goals promote equitable economic grow th, equi-

table social development, and integrated a nd sustainable management of

natural re sources and ecos ystems.8

Sustainable development is rooted in equitably meeting the developmen-

tal and environmental needs of present and f uture generations.9  is concept

of intergenerational equity was rst emphasized in the Stockholm Declara-

tion prea mble, stating that “[t]o defend and improve the human environ-

ment for present and future generations has become an imperative goal of

humankind.”10 Furthermore, the United Nations Framework Convention

1. Webinar: Business and Climate Justice: What Role Can Business Play in Tackling the Human Rights

of Impacts of Climate Change? (U.N. Global Compact and Mary Robinson Foundation 2015),

https://www.unglobalcompact.org/library/1231.

2. Adoption of the Paris Agreement, UNFCCC Conference of the Parties, 21st Sess., U.N. Doc. FCCC/

CP/2015/10/Add.1 (Dec. 12, 2015), http://unfccc.int/les/home/application/pdf/paris_agreement.

pdf.

3. Id.

4. Id.

5. Rio Declaration on Environment and Development, U.N. Conference on Environment and Develop-

ment, Rio de Janeiro, Brazil, June 3–14, 1992, Annex 1, U.N. Doc. A/CONF.151/26 (Vol. I) (1992),

http://www.un.org/documents/ga/conf151/aconf15126-1annex1.htm [hereinafter Rio Declaration].

6. United Nations, e Sustainable Development Agenda, http://www.un.org/sustainabledevelopment/

development-agenda/ (last visited Aug. 21, 2016).

7. Id.

8. Id.

9. Rio Declaration, supra note 5, at Annex I, Princ. 3 (noting that the “right to development must

be fullled so as to equitably meet developmental and environmental needs of present and future

generations”).

10. Declaration of the United Nations Conference on the Human Environment, U.N. Conference on the

Human Environment, Stockholm, Sweden, June 5–16, 1972, U.N. Doc. A/CONF.48/14 (1972),