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

• Date: 01 February 2017

2-2017 NEWS & ANALYSIS 47 ELR 10151

Corporate

Responsibility:

Promoting

Climate Justice

Through the

Divestment of

Fossil Fuels and

Socially Responsible

Investment

Josephine M. Balzac

Josephine M. Balzac is a visiting assistant professor at

Rollins College in the Department of Business. She

is also an adjunct law professor at Barry University

School of Law teaching sustainability in business.

Summary

Heightened awareness of climate change has inspired

institutional investors to divest from fossil fuels. At the

same time, investors have pushed for a new sustainable

energy economy with socially and environmentally

responsible investments. is fossil fuel divestment and

investment in sustainable and socially responsible busi-

nesses will become a powerful driver of change, and

will promote climate justice by taking a human-cen-

tered approach to climate change and safeguarding the

rights of present and future generations. is Article,

adapted from Chapter 5 of C J: C

S  G  R  G

(ELI Press 2016), explains that although the actions

undertaken are voluntary, they represent an important

shift in thinking necessary for a sustainable future.

Introduction

People of conscience need to break their ties . . . it makes

no sense to invest in companies that undermine our future.



e perpetuation of business as usual in the climate change

era endangers the future of huma n existence and, conse-

quently, imperils the realization of human rights.1 e

recent signing and adoption of the Paris Agreement signi-

es a global consensus t hat climate change is an urgent

threat and common 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 temperature increase to 1.5°C above pre-

industrial levels.3 e Paris Agreement is undergirded by

principles of equity, common but dierentiated responsi-

bilities, sustainable development, and poverty eradication.4

Protecting the environment and eradicating poverty are

an “indispensable requirement and integral part of achiev-

ing sustainable development.”5 Sustainable development

incorporates three components: environmental protec-

tion, social development, and economic development. On

January 1, 2016, the 17 Sustainable Development Goals

of the 2030 A genda for Sustainable Development o-

cially beca me eective.6 e goals include women’s rights,

eradicating poverty, climate action, food security, envi-

ronmental protection, health, education, equality, and job

opportunities.7 e Sustainable Development Goals pro-

mote equitable economic growth, equitable socia l devel-

opment, a nd integrated and susta inable mana gement of

natural re sources and ecos ystems.8

Sustainable development is rooted in equitably meet-

ing the developmental and environmental needs of present

and future generations.9  is concept of intergenerational

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.unglobal-

compact.org/library/1231.

2. , UNFCCC Conference of the Parties, 21st

Sess., U.N. Doc. FCCC/CP/2015/10/Add.1 (Dec. 12, 2015), http://un-

fccc.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 Development, 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/aconf15126-1a nnex1.htm [hereinafter

Rio Declaration].

6. United Nations,  , 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”).

Copyright © 2017 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.