Where should governments with the requisite political will to act begin?

Furthermore, states should include references to the right to a healthy environment into national action plans (NAPs) on Business and Human Rights. Embedding these rights into NAPs would help ensure that they are entrenched in policy decisions at the domestic and transnational levels. States might also leverage NAPs to ensure greater coordination between government ministries to act on climate change and climate change-related human rights impacts. When negotiating trade and investment agreements, states should also ensure adequate policy space to take climate action, including phasing out of fossil fuels, promoting environmentally friendly procurement policies, and increasing efficiency standards on machinery and other goods.

The ways that policy decisions are made and enacted also need attention so that they are consistent with a human-rights-based approach. For example, mitigation and adaptation decisions and efforts must, where relevant, incorporate the knowledge of Indigenous Peoples and obtain their consent. In 2009, the United Nations Human Rights Council recognised self-determination as one of the human rights most affected by climate change. The rights of Indigenous Peoples to participate in decision-making and to be consulted on matters that may affect them are the cornerstones of Convention No. 169 and are also central to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). In Asia, recognition and enforcement lead by example. SOEs currently produce a significant share of energy-related carbon emissions. In China, SOEs contribute about half of all carbon emissions. There is another compelling reason to encourage and prioritise SOEs in decarbonisation plans. As the UNGPs make clear, an abuse by a firm affiliated with the state could manifest as a violation of the state’s own obligations under international law.

Beyond SOEs, states act as important economic actors through government procurement. This activity on its own typically represents 13% of GDP in countries, whatever their level of development.⁶⁰ Governments should thus align their own purchases of goods and services with sustainability net zero goals. This could involve, for example, awarding contracts to companies that reduce carbon emissions consistent with national plans and targets. Such a strategy is not necessarily straightforward, however, and effective results require suppliers who can gather the relevant data and use specific approaches.⁶¹ Nevertheless, Green Public Procurement programmes in Europe provide useful templates.⁶² Moreover, in Asia, Bangladesh, Indonesia, Japan, Malaysia, the Philippines, Singapore and Sri Lanka are already committed, through signing of the Helsinki Principles, to “take climate change into account in… procurement processes”.⁶³

Where should leaders focus company efforts, especially in weak, or weakly-enforced,regulatory environmentsion?

Efforts to reduce GHG emissions and address climate-related human rights impacts, as listed above, should also include support to suppliers with the technical skills and financial support that they need to adapt.

“There needs to be additional incentives for smaller players to comply. How can we share the burden of producing palm oil in a responsible manner across the entire value chain? How can more of the fast-moving consumer goods brands, the retailers, get involved and share the resources needed to implement sustainable practices?” offers Rashyid Anwarudin, chief sustainability officer of Sime Darby Plantation Berhad (SPD).

Due diligence and compliance measures do come with a significant price tag and compliance will take time to gain a toehold in value chains. “If you’re a small producer who's selling to an independent mill, your costs of complying are going to be huge. Because somehow, somebody has to build a supply chain traceability mechanism that allows your sustainably produced oil palm to be tracked and traced and documented all the way through the supply chain,” says Mr D’Cruz.

Going into further detail is difficult as the challenges facing companies, and the ideal responses, very much depend on the specific conditions in which these companies find themselves. Accordingly, we now take a closer look at several industries – apparel and garments, palm oil and paper, as well as mining – to look for the lessons which they might provide.

Climate change also creates various risks for the sector. Heat stress, for example, will affect the quality of working conditions across the region, in particular for the 75% of workers who are female, according to the ILO.⁶⁶ Also, as noted earlier, many of the factories on which the industry currently relies are susceptible to flooding in the near future.⁶⁷

Corporate mitigation and adaptation efforts in the face of such challenges are mixed. The clearest divide is between small manufacturers and large apparel retailers. The former are largely failing to act, according to research by Cornell University’s Global Labour Institute. Most firms sit outside the scope of scrutiny, an issue exacerbated by the growth of online retail, says Jason Judd, the institute’s executive director. “There is a sub-industry producing for brands that gets no scrutiny and which we have never heard of. There is a whole world of production out there totally untouched by private regulation,” he says.

Even large retail brands are failing to act on some issues. There is no evidence, for example, of plans to mitigate possible large-scale employment and income losses from sea-level changes. There is also scant evidence of efforts to reduce climate-related, pastureland degradation or to improve climate adaptation capacities of upstream suppliers of products like cashmere.

Nevertheless, for the many large apparel companies which buy products from, or produce in, Asia, driving down carbon emissions within supply chains is often near the top of the agenda. For them priorities include increasing the proportion of recycled materials in their garments, reducing plastic packaging and finding manufacturing efficiencies to drive down energy demands.

For instance, “fast-fashion” retailer H&M demonstrates what firms both within the direct industry and beyond can do. The company maintains that the substantial attention that it pays to climate change reflects consumer demand that clothing producers “green” their operations.

Energy reduction is ultimately within the control of individual companies, although, as alluded to earlier, broader decarbonisation of the garment sector will be difficult, as government monopolies over power production rely heavily on fossil fuels. Secure power purchasing agreements (PPAs) from green energy producers would be a way out, but are unavailable in most markets where clothing manufacturers operate.

But European and US consumer markets are increasingly scrutinising value chains for environmental and human rights abuses, and smaller suppliers face the risk of being cut off if they fail to comply. In the pulp and paper industry, the APRIL Group is one of the world’s largest producers of fibre, pulp and paper. Its president, Praveen Singhavi, says that all fibre supplied to mills is subjected to a rigorous due diligence process before and during the supplier’s contract term to ensure compliance with the firm’s sustainability policy as well as with international and national regulations.

“We view our suppliers and contractors as our growth partners, and actively support them by providing the necessary assistance to help them meet our sustainability standards. This includes cooperating closely with them to ensure that responsible sourcing is practised systematically throughout our supply chain”, he says. This can involve actively supporting suppliers to reach higher levels of compliance, he adds.

The company also uses satellite and drone technology, and conducts direct observation, to monitor land cover change to detect cases of deforestation.

Looking at palm oil, some larger firms have taken a blunt approach, removing suppliers from value chains for violations in production. Confectioner, Mars, announced in 2020⁷⁰ that it would slash the number of palm mills in its supply chain from 1,500 to less than 100, and halved its supply base again in 2022. The aim has been to weed out unsustainable practices, dropping mills that do not meet its standards. While some green groups welcomed the move, they also recognised the risk of smallholders being left behind, continuing with unsustainable and harmful practices and selling to global buyers with fewer scruples on forest protection and human rights.

Sime Darby Plantation Berhad (SDP) has gone a different route. “Our approach is inclusive,” explains Mr Anwarudin, the company’s chief sustainability officer. “We need to constantly engage with suppliers and give them every chance to comply with requirements.”

The Roundtable on Sustainable Palm Oil (RSPO), the industry watchdog for palm oil growers, buyers, investors and non-governmental organisations (NGOs), has adopted stricter guidelines for palm oil production, including a ban on cutting down forests and using carbon-rich peatlands for plantations. SDP, a member since 2004, is the world’s largest producer of RSPO certified sustainable palm oil.⁷¹ However, goods produced by SDP were blocked by US Customs and Border Protection in December 2020, over suspected abusive labour practices. In February 2023, US customs authorities lifted the two-year import ban on palm oil products made by the firm after determining the goods were no longer produced with forced labour. SDP, and its subsidiaries and joint ventures, is among six entities that have been subjected to import bans by the US in the past four years over forced labour allegations.

“The system is struggling [to get suppliers to comply] because it's a system that, at the end of the day, is based on profits, which don't account for the full, real value of commodities,” says Stefano Savi, director at Global Platform for Sustainable Natural Rubber. “The most effective lever [for change] is businesses working to monetise negative externalities and realising that this has an impact on the bottom line.”

Mining companies have long faced accusations of human rights abuses and environmental degradation. According to the Business & Human Rights Resource Centre, allegations of abuses in this sector over the past 15 years include: displacement of communities; adverse impacts on land, water and housing; chemical pollution leading to the loss of important biological species in ecologically important areas, depletion of ground water resources; poor reclamation; denial of freedom of expression and association; child labour; and physical attacks on human rights defenders, including killings. Nearly 500 allegations are related to the extraction of “transition minerals'' (2010-2020),⁷⁴ with a third of those involving alleged attacks on human rights defenders.

While vital for the energy transition, the mining of these key metals is a significant contributor to climate change. Mining transitional minerals has a higher GHG emission intensity than bulk metals and can impact land cover, harm biodiversity, and displace communities. Mining and mineral processing is also water intensive and poses contamination risks through acid mine drainage, wastewater discharge and tailing disposal, with the potential to cause large-scale environmental hazards.

The mining industry needs to transition to clean energy and to implement measures to reduce their impact on the environment. Within mining, scope 1 and 2 emissions in a firm’s immediate operations account for 4% to 7% of global GHG emissions, which can rise as high as 28% when taking scope 3 emissions into account.⁷⁵