Net Zero, Human Rights, and ESG risk management

The rapid transformations of natural resources law and policy in response to the ongoing transition to net zero energy sources have resulted in a significant integration and expansion of environmental, social, and governance (ESG) standards in natural resource investment and planning. Failure to comprehensively address direct and indirect ESG risks in a transactional context could result in significant financial, reputational, and litigation risks for natural resource sector operators and investors. Yet, the lack of regulatory clarity, inconsistent reporting, and capacity gaps on the nature, scope, and elements of ESG, have not fostered coherent and systemic integration of ESG norms in natural resources law and practice. After examining the current and emerging ESG risks associated with net zero energy transitions, this chapter unpacks the drivers and dimensions of ESG risks in a net zero era, the natural resources law and policy innovations, as well as corporate governance strategies required to address such risks.