Press release: 25 August 2023

UN warns Aramco and its financiers over their role in driving climate-fuelled human rights violations

United Nations human rights experts have sounded the alarm over the significant human rights impact Saudi Aramco and its financial backers have across the world through the state-run oil company’s outsized contribution to the climate crisis.

The warning comes after ClientEarth in London filed a legal complaint in 2021 accusing Aramco of the largest ever climate-related breach of international human rights law by a business. The complaint also named the company’s key financial supporters, including Citigroup, HSBC and JPMorgan Chase, for facilitating the company’s impact on people and the environment.

Aramco is the world’s single biggest corporate emitter, yet plans to sustain its massive fossil fuel production and sales through the energy transition and explore for yet more reserves. In a ‘Communication’ to the company published today, the UN experts expressed concern about how the oil giant’s actions may contribute to undermining the Paris Agreement in the face of the existential threat to human rights posed by climate change.

They also said the involvement of financial institutions in the financing of Saudi Aramco’s activities could be in violation of international human rights law and standards.

It is the first time the UN experts have taken action about an oil major’s human rights responsibilities for climate change under the UN Guiding Principles on Business and Human Rights (UNGPs), or against financial backers of oil and gas expansion.

A ClientEarth spokesperson said: “Today’s warnings set a new legal standard for fossil fuel companies’ human rights responsibilities for the climate crisis, as recent extreme heat spikes, floods, wildfires and storms continue to cost lives across the globe.

“People in every country, on every continent, are being affected by climate change. By failing to address its role as the single biggest corporate emitter of the greenhouse gases driving climate catastrophe across the planet, we believe Aramco is committing the world’s largest climate-linked breach of human rights law by a business.

“At the same time, the banks and financial companies supporting Aramco’s harmful activities are continuing to enable its fossil fuel expansion plans. The UN experts could not be clearer: banks bear their own legal responsibility regarding the escalating and detrimental threat climate change poses to human rights.”

Aramco has not provided a response to the UN experts since the Communication was sent to the company 60 days ago.

Financial enablers

Aramco reported in March that its annual profits soared by 46% to a record $161bn (£134bn) profit for 2022, the largest ever annual earnings recorded by an oil and gas firm. Since 2019, the company has raised more than $70 billion through equity, bonds, and bank loans.

The financial firms facilitating these transactions and directly lending to the company have a responsibility under the UNGPs – the global standard on business and human rights that all companies must follow – to remediate the human rights impacts caused by its activities.

ClientEarth said: “The banks must act on Aramco’s role in climate human rights harms. They should be using their leverage to prevent the oil giant from continuing to fuel human rights violations. That means Aramco ending its pursuit of fossil fuel expansion and aligning with the Paris Agreement. And if the banks lack sufficient leverage, they must consider terminating their relationships with the company.

“Business as usual for financial businesses won’t cut it in a world that is fast moving to mandatory environmental and human rights due diligence, and the legal risks that come with it. It is the banks’ responsibility – and in their best interests – to seriously consider whether they have the appetite for the mounting risks presented by their continuing ties to the largest polluters that are expanding fossil fuels.”

Of the financial businesses, Societe Generale responded to the UN experts, stating that it was committed to aligning its portfolios with 1.5°C scenarios, and HSBC gave a response.

Human rights and climate change

ClientEarth’s complaint was considered by the Special Rapporteur on human rights and the environment, the Special Rapporteur on  climate change, the Special Rapporteur on toxics and human rights and the Special Rapporteur on the rights to water and sanitation and the Working Group on Business and Human Rights – independent human rights experts appointed and mandated by the UN Human Rights Council.

They expressed “the most serious concern” with the impacts on human rights caused by the exploitation of fossil fuels, citing, for example, the effect of extreme heat on the global water crisis that already affects 2 billion impoverished people who cannot access safe drinking water.

The experts also highlighted the duty of States to protect human rights by adopting and enforcing a smart mix of laws, regulations and policies that encourage or require business to reduce emissions.

The UN warning sets an important legal precedent clarifying how international human rights law regulates the largest polluters driving the climate crisis – and how it can be used to help hold them accountable in courtrooms around the world.

Greenwashing

Saudi Aramco refuses to align with the Paris Agreement goal of keeping global temperature rises under a safe limit of 1.5C. Its claimed climate target, to achieve net zero emissions by 2050, excludes the vast majority of its climate impact – including the ‘Scope 3’ emissions from the products it sells.

Yet, Aramco still pushes out widespread marketing and advertising campaigns to promote the ‘sustainability’ of its business and its products. In their complaint, ClientEarth’s lawyers say this advertising presents a false picture of Aramco’s business and constitutes greenwashing, which impedes efforts to reduce reliance on fossil fuels.

The UN expressed concern with the allegations, “in view of the negative impacts that misinformation and disinformation on climate change can have on mitigation and adaptation efforts—as well as on the wider enjoyment of all human rights”.

It said businesses should refrain from  public information campaigns based on inaccurate, misleading, and unfounded assertions that harm the ability of governments and the public to make informed decisions pertaining to climate change.

ENDS

Notes to editors:

Copies of the UN experts’ Communications and the responses given by governments and companies are or will be available on the Communications’ database, accessible through searching by the term ‘Aramco’, here.

A full FAQ document relating to ClientEarth’s complaint can be found here.

A copy of ClientEarth’s September 2021 complaint can be found here.

• • ClientEarth’s complaint was filed with the UN Special Procedures, comprised of independent human rights experts appointed by the UN Human Rights Council. Specifically, the complaint was sent to the Working Group on Business and Human Rights, and the Special Rapporteur on human rights and the environment. Additional UN experts chose to participate in the Communications: the Special Rapporteur on climate change, the Special Rapporteur on human rights and toxics, and the Special Rapporteur on the rights to water and sanitation.
  • The Communications issued by the UN Special Procedures took into account further information which may have provided by others, in addition to ClientEarth’s complaint. The UN Communications were sent to Saudi Aramco, the Kingdom of Saudi Arabia and a list of ten international banks and two investment funds which support Saudi Aramco: JPMorgan Chase, Citi, HSBC, SMBC Group, Crédit Agricole, Morgan Stanley, BNP Paribas, Goldman Sachs, Mizuho Financial Group, Société Générale, the Saudi Public Investment Fund and EIG Global Energy Partners. Communications also went to the governments of the home countries of the companies involved, the governments of: the UK, the USA, Japan and France.
  • Société Générale and the French and Japanese government responded to the UN experts, setting out their policies on climate change and on human rights. HSBC also provided a response (as of 26 August the response is still not uploaded to the UN website).
  • The Communications are not judgments or Court orders but can have a significant influence on how Courts and other actors interpret and apply human rights law, relevant in corporate climate responsibility cases such as the one brought by Milieudefensie against Shell in the Netherlands. The Communications are also relevant to the forthcoming European sustainability due diligence law.
  • The UNGPs are a ‘soft law’ international human rights instrument, unanimously adopted by the UN Human Rights Council in 2011. They are the authoritative global framework to identify, prevent and address adverse human rights impacts related to business enterprises (corporations). The three pillars of the UNGPs are: Pillar 1 (the State duty to protect human rights), Pillar 2 (the corporate responsibility to respect human rights, and Pillar 3 (access to remedy). They apply to all businesses, globally, and many large financial institutions have detailed plans in place to ensure compliance.
  • In June 2023, the UN Working Group on Business and Human Rights published an Information Note on Climate Change and the UNGPs which sets out that States and businesses have obligations and responsibilities regarding the impact of climate change on human rights.
  • Under international human rights law, any governmental, legal or policy responses to climate change that involve business should be aligned with the UNGPs as well as complying with relevant international climate and human rights treaties and their current interpretation.

About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.