ESG provides guidelines for companies to provide finance in a way that is sustainable for the world and planet. It involves adopting attitudes and measures that comply with environmental, social, and governance objectives. Human rights plays an important role in each limb. It was declared by the United Nations in 2022 that there is a human right to a healthy environment. The social (S) and governance (G) limbs also have a strong relationship with human rights (eg, anti-discrimination).

For lawyers, it is important to ensure that the companies with which they work avoid damaging or failing to protect human rights in their activities.

In 1999, Kofi Annan stated that, although primarily a State issue, businesses also have a duty to respect human rights. A framework to reflect this principle was developed in soft law, but a body of hard law is forming gradually.

In investment arbitrations, traditionally, arbitrators sought to ensure and protect the rights of investors. However, in recent years, arbitrators have sought to rebalance the protection of investors with the protection of human rights.

Recent cases have shown that companies can no longer claim to have rights pursuant to bilateral investment treaties (BITs) without the accompanying obligations.

The protection of human rights by businesses has inspired various new legal developments, including challenging the corporate veil. As companies have to respect and protect human rights, so do their affiliates, subcontractors and suppliers, meaning that businesses may be at risk of liability for breaches of human rights all along the supply chain. In addition, companies now, like states, must comply with some principles of international public law.

These treaties were traditionally very much in the interests of investors and there were no provisions for balancing the protection of investors with human rights. There are now BITs that contain obligations for investors to protect human rights (including the environment). The African Arbitration Academy’s Model Bilateral Investment Treaty for African States is an example of a treaty that contains interesting provisions on how the protection of investments and investors should be dealt with in the years to come.