Corporate responsibility in the climate change discussion: OECD Guidelines
Updated: Nov 28, 2022
Anannya Meghani is a second-year law student at King's College London. She is interested in pursuing a career in International Law. In the following blog post, she explores the soft law remedies propounded by the OECD. The blog can be viewed as a short glimpse into foundational concepts which may be explored by the reader further through the links provided.
Over the past decade the climate conversation has erupted with much force. In 2015, almost 200 countries backed a global plan, the Paris Agreement, to keep the global temperature rise well below 2°C. However, this goal seems more elusive than ever; even if all climate pledges are met the world is bound to see a global increase of 2.4°C. This increase will have a devastating impact, countries will vanish under rising sea levels, climate refugees will emerge, and the world will be in a dire code red situation.
Following the recent conclusion of the COP26 nations are under renewed pressure to take effective action. Concurrently, the private sector is also being coerced to commit to sustainable and meaningful action. The private sector contributes to 70% of the world’s greenhouse gas emissions. This post will discuss soft law remedies in the realm of climate action. Besides taking an interest in the legal dimension of the matter, these are developments that we should be aware of as responsible consumers.
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The OECD is an international organisation that works on economic and social policy. It has developed a set of guidelines for responsible business conduct. The guidelines foster a transparent approach where companies should make their environmental impact public so that consumers can make an informed choice. Accordingly, several enterprises like Microsoft and Apple have made certain climate pledges for the reduction of carbon footprint. NGOs, employees, and communities can bring complaints against corporations if they have breached OECD guidelines. (Please find OECD guidelines here)
Enhanced Due Diligence and Human Rights
The OECD also has a detailed guidance for responsible supply chains of minerals from high-risk areas. Due diligence is a reactive and proactive process through which companies can ensure that they respect human rights. Climate change and human rights usually intertwine. Especially, in the field of mineral extraction which involves poor working conditions and several health concerns. Setting up mineral factories also displaces local communities without adequate compensation. (Please find the guidelines here)
Greenwashing is the process of creating a false impression that a company’s products are environmentally sound. Green marketing is often used by companies to deceive consumers and persuade them to buy their products. One specific OECD complaint that illustrates this point is ClientEarth v BP (UK), whereby ClientEarth alleged that BP’s adverts conveyed that increases in global primary energy demand are desirable and inevitable for progress and development, while omitting information about the negative impacts of climate change caused by the use of fossil fuels. Although, the complaint was rejected it was a positive development in combatting greenwashing.