Investors and governments are not adequately addressing Uyghur forced labour risks in the renewable energy sector, research has found.
Anti-Slavery International, the Helena Kennedy Centre for International Justice and the Investor Alliance for Human Rights published an investor guidance and policy briefing on green technology supply chains on Monday.
The co-authors said business leaders and ministers must develop more effective and proactive strategies to address systemic forced labour risks in the sector due to supply chain reliance on the Xinjiang Uyghur Autonomous Region in China.
The country has been accused of committing crimes against humanity and possibly genocide against the Uyghur population and other mostly-Muslim ethnic groups in the north-western region.
Both solar and electric vehicle industries have been heavily impacted by forced labour in the region, given its dominance in green technology material supply and production, the report said.
The researchers, who carried out interviews with investment professionals to understand how investors have responded to the risks in their portfolios, warned that any materials sourced or produced in the Uyghur region carry human rights risks.
The paper also notes that green technology processing in the Uyghur region is also heavily reliant on coal-generated electricity, which is key to the “cost-competitiveness” of the Uyghur region’s solar industry, according to the International Energy Agency.
The researchers therefore argued that this also puts the solar industry at risk of greenwashing and potentially delays the transition to net zero.
The report 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 co-ordinated international governmental collaboration.
It calls for such collaboration from governments to scale up and support the growth of alternative green technology supply chains.
Elsewhere, the paper outlines 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 includes tools for investors to identify, exclude or engage businesses linked to these risks from their green energy portfolios.
The report also explores how investors can re-channel investments into companies that champion sustainability, innovation and supply chain resilience as well as outlines policy measures governments can take to facilitate those investments.
Anita Dorett, director at the Investor Alliance for Human Rights, said: “Investors in green energy sourcing from the Uyghur Region face heightened risks and reduced options.
“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.”
Caroline Dale, representative for Helena Kennedy Centre for International Justice at Sheffield Hallam University (SHU), said: “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.”
Jakub Sobik, communications director at the Modern Slavery and Human Rights Policy and Evidence Centre, which funded the research, said: “The global efforts to address climate change and move to clean energy should not come at the expense of increasing the risks of people being exploited.
“We hope this new evidence can inform the UK Government’s and investors’ efforts to minimise these risks in practice.”
PA has contacted the Department for Net Zero and Energy Security for comment.