Principles on Climate Obligations of Enterprises

PREFACES xi
GLOSSARY OF ABBREVIATIONS xiii
TEXT OF THE PRINCIPLES 1
ANNEX (MEMBERS OF THE GROUP AND ENDORSERS) 11
GENERAL COMMENTARY 13

1. Introduction 13
2. From the Oslo Principles to the Enterprises Principles 17
3. Drafting the principles and the commentary: working method 17
4. The members of the group and endorsers 19
4.1 Members of the group 19
4.2 Endorsers 20
5. The 2-degree threshold 23
6. Leading enterprises and organisations of enterprises sound the alarm 24
7. Advantages of achieving reductions 27
8. The desirability of a focus on the obligations of enterprises 28
9. Not all potentially relevant activities are covered by our principles 30
10. How to attribute emissions 32
10.1 Introduction 32
10.2 General attribution of emissions 32
10.3 Attribution of emissions from oil 34
10.4 Attribution of emissions from electricity production 34
10.5 Attribution of emissions from leakages 36
11. Obligations should be as concrete as possible 36
12. The legal nature of the principles 38
13. The purpose of our Principles 40
14. The Principles fit into an emerging trend around the globe 41
15. Focus on prevention (reduction of GHG emissions) 41
16. Achieving the reductions required still affordable 43
17. Carbon pricing 45
18. The role of courts 47
19. Relation to the OP 49
19.1 Introduction 49
19.2 1.5 or 2 degrees? 50
19.3 The role of the precautionary principle 59
19.4 Per capita approach and the Paris Agreement 60
19.5 The need to reduce the emissions to the permissible level 61
19.6 The not so special position of developing countries 63
19.7 Historical emissions 63
20. Legal basis 66
20.1 General observations 66
20.2 A three-tier process 67
20.3 Tort law 68
20.4 International and human rights law 72
20.4.1 Introduction 72
20.4.2 Minimal contribution and international law 83
20.4.3 Lower domestic standards and international law 83
20.5 Guidelines and Codes of conduct 84
20.5.1 Introduction 84
20.5.2 Guiding Principles on Business and Human Rights 87
20.5.3 OECD Guidelines for Multinational Enterprises 87
20.5.4 United Nations Global Compact 89
20.5.5 ISO 26000 94
20.6 Final observations on the legal basis 95
21. Obligations of other players 97
22. A general exemption for hard cases 97
22.1 Introduction 97
22.2 Concrete examples of hard cases 98
23. Enforcement of the principles: daydream or reality? 100
24. Endorsement of the principles 101
25. Temporal effect of the principles 102
COMMENTARY TO RESPECTIVE PRINCIPLES 103
Principle 1 103
Enterprise 103
Global enterprises 105
Reduction percentage that the world has to achieve 109
Principle 2 110
Justification 110
Enterprises in APQ and BPQ countries 111
The Paris Agreement 112
International transport 114
Various kinds of GHGs 115
Hard cases 117
Mergers, acquisitions, disposals, expansions or down-scaling of activities 118
Gap filling obligations 121
Principles 3 and 4: the distinction between complying and non-complying countries 121
Principle 3.1 123
A not exhaustive list 126
Principle 3.2 127
The potential ramifications of investment treaties 127
Principle 4.1 128
Principle 4.2 129
Principle 5 129
Justification 129
Flexibility in relation to global enterprises in BPQ and APQ countries 133
The reduction percentage of the world at large 135
Gap filling obligations 135
Principle 6 137
Principle 7 138
Principle 8 140
Principle 9 141
Best practice 144
Timeframe 146
Principle 10 146
Principle 11 149
Principle 12 150
Principle 13 151
Principle 14 153
Principle 15 158
Principle 16 160
Principle 17 160
Legal basis 163
Further reaching obligations? 165
Disclosure obligations: Principles 18-23 166
Principle 18 168
Legal basis 169
Correct compliance is rewarding 181
Principle 19 181
Principle 20 183
Principle 21 185
Principle 22 186
Principle 23 187
Principle 24 192
Obligations of investors and financiers 198
Reasons for concern 198
The overarching rationale 200
Business as usual is not an option 201
How to cope with uncertainties? 202
‘Must ascertain and take into account’ 203
The distinction between Principle 25 and Principles 26-30 205
Principle 25 205
Principles 26-28 208
Why should investors care about climate change? And why can they make a difference? 209
A focus on the long term is required 210
Are an adequate return on investment and a focus on climate change reconcilable? 212
Sustainable investment and the practicalities of divesting 214
What do we mean by investors for the purpose of these principles? 215
Asset Managers and the continuing responsibility of investors/trustees 217
Legal basis of Principles 26-28 218
Fiduciary and related duties 218
Do non-financial factors matter? 221
Climate change has a significant impact on investments and is a financial issue 223
Principle 26 227
Principle 27 230
Non-compliance with obligations 230
Justifications for buying or keeping equity issued by non-compliers 232
A sufficient justification? 233
Specific requirements of investors 234
Scope 2 and 3 emissions 234
Disclosure on request 235
Principle 28 235
Other fossil fuels 236
Principle 29 237
Principle 30 239
Room for elaboration and further research 241
Epilogue 243
Bibliography 247
General publications 247
Case Law 289
International courts 289
National courts 289
International instruments 291
International legislation 291
European legislation 291
United Nations resolutions 292
Declarations 292
Guidelines 292