By Louisa Guy, UK Policy Analyst, PRI


The UN has declared access to a clean, healthy, and sustainable environment a human right. Whilst this declaration is not legally binding, it signals a further shift in the landscape towards mainstreaming investors’ pursuit of positive sustainability impacts. 

Creating positive, real-world outcomes

The right to a clean, healthy, and sustainable environment is now universally recognised. States, international organisations and businesses have an indisputable role to play in tackling societies’ most pressing issues. In particular, investors must understand and manage their sustainability impacts on the real world.

The PRI welcomes this UN announcement, as it is the strongest demonstration yet for wider environmental laws. Our Legal Framework for Impact (LFI) project, which identifies and interprets aspects of the law to help investors to pursue sustainable outcomes, calls for greater clarity on the impacts that financial investments and economic activity have on climate change, sustainable development and human rights.1

Climate change is a social issue

It is increasingly apparent that to achieve a sustainable economy, environmental, social, and governance (ESG) issues must no longer be looked at in insolation. There is a strong connection between the ‘E’ and the ‘S’. In other words, climate change is a social issue. Investors must follow this shift by integrating social dimensions into their climate strategies.

Whilst the practice of investors integrating ESG into investment decisions has grown exponentially, many are going even further by actively pursuing positive sustainability impacts. Our LFI project has helped this transition by explaining the legal framework when it comes to achieving positive sustainability impacts and encouraging policy reform to clarify fiduciary duties.

Using the law for good

The UN’s latest declaration is part of an increasing trend of ‘just transition litigation,’ as described by the London School of Economics (LSE), where lawyers use human rights arguments to question how the benefits and burdens of transitioning to net zero are distributed when climate laws are passed.2   The resolution also strongly challenges ecologically destructive policies and projects that expose investors to legal, financial, and reputational risks.

We already know that previous UN resolutions have led to stronger environmental laws and positive real-world impacts, protecting those who are most vulnerable to the climate crisis. For example, following the UN’s recognition of the right to safe and clean drinking water and sanitation in 2010, Mexico, Slovenia, Costa Rica, Fiji, Colombia and France implemented legal changes to make safe drinking water available to all. This was particularly timely, as the World Health Organisation declared in 2010 that approximately 17% of the world’s population lacked access to safe sources of drinking water, and 1.5 million children under five years old died each year as a result of water and sanitation-related diseases. 

There is a clear direction of travel. The latest UN announcement comes one month after the UN Development Programme recommended further steps to advance the right to a clean, healthy, and sustainable environment, including strengthening legal frameworks, ensuring inclusive processes, and empowering local communities to be active participants in environmental protection.

How investors can step up

Investors with long-term time horizons are more exposed to the risks of climate change and the impacts it will have on their ability to deliver returns for beneficiaries. To maintain and improve long-term financial performance, investors have a responsibility to consider how sustainability risks affect their ability to achieve investment returns.

To mitigate sustainability risks, investors may need to pursue positive sustainability impacts. In doing so, they should consider the following:

  • What sustainability impact(s) are they trying to achieve?
  • What steps will they take to achieve this?
  • How will their stewardship approach contribute?
  • How will they measure sustainability impact(s)?

A set of just transition principles and strategies connects climate action with the need for an inclusive economy and sustainable development.3  It anticipates the social implications of the shift to a net-zero economy as well as the increasing physical impacts of climate change. For investors, a just transition takes the core of responsible investment and applies it to climate change. Through this approach, investors can better understand systemic risk, reinvigorate fiduciary duty, recognise material drivers of long-term value, uncover investment opportunities, and contribute to societal goals.4

By contributing to a low-carbon economy through the lens of human rights i.e., integrating employment, decent work and community dimensions into climate action, investors can achieve positive sustainability impacts and a just transition. In this way, investors can help fulfil the UN-mandated right to a clean, healthy, and sustainable environment.

This blog is written by PRI staff members and guest contributors. Our goal is to contribute to the broader debate around topical issues and to help showcase some of our research and other work that we undertake in support of our signatories. Please note that although you can expect to find some posts here that broadly accord with the PRI’s official views, the blog authors write in their individual capacity and there is no “house view”. Nor do the views and opinions expressed on this blog constitute financial or other professional advice. If you have any questions, please contact us at [email protected].