Exploring the Suitability of Arbitration for Settling ESG and Human Rights Disputes

Abstract

Environmental, Social and Governance (ESG) and Human Rights (HR) have become two of the most widely discussed topics in the last few years for businesses and law firms alike, but to what extent can ESG and HR issues be resolved through arbitration? This article examines the ESG and HR obligations that currently exist for companies, and analyses their gradual shift from soft law to binding hard law obligations. The rising number of ESG and HR related hard law obligations, paired with the increasing commercial awareness of the importance of ESG and HR, naturally leads to a greater potential for disputes. This article explores to what extent arbitration may be an appropriate dispute resolution method for these claims. In particular, it recognizes that although limitations to arbitration (such as in transparency and third party participation) exist, amendments have already been made to institutional rules to better position arbitration towards handling ESG and HR disputes. With the continuation of this trend, it is expected that arbitration will be more commonly used to resolve ESG and HR disputes. ESG, Environmental, Social, Governance, Human Rights, Dispute, Arbitration, ADR, Climate Change, Sustainability