A lack of a cohesive approach to tackling climate issues will be one of the key barriers to solving the climate crisis. Failing to plan in relation to business operations will further delay the ability to respond to and mitigate impacts of climate change, and ultimately may lead to failure, both for organisations and our planet. The latest IPCC report outlined that while many businesses have committed to ambitious climate plans, there is a considerable lack of action in this space.
With London Climate Action Week focusing on ‘delivering fair inclusive and just climate transitions’ (Theme 3), it follows to consider not only how companies plan to transition to net-zero, but what the potential social implications will be.
Much attention has been paid to how to measure and manage climate impacts, including calculating emissions, setting targets, and assessing climate-related risks and opportunities. However, the concept of a Just Transition and how it feeds into business objectives has been arguably less prominent. Understandably, for such a subjective and qualitative subject, the approach is more nuanced than that of emissions calculations and reduction. Furthermore, despite a long history and relevance worldwide, the lack of a clear, standardised approach across industries has resulted in a confusing landscape in which to start formulating an approach.
The concept of a Just Transition is not new, but the latest guidance from the Transition Plan Taskforce (TPT) marked a turning point in putting pressure on companies to integrate the concept into their standard corporate reporting. With Transition Plans expected to be mandatory for listed companies by 2024, the clock is ticking for organisations to create credible and robust plans.
Just Transition; the What?
A Just Transition requires going beyond the economic transformation to low-carbon or net-zero business, and considering the wider impacts of a company’s transition on their workers and society, and ensuring it remains equitable and fair. Organisations such as the International Labour Organisation, the UN Global Compact, Climate Action 100+ and the Paris Agreement have all explicitly referenced the importance of a Just Transition. Despite this, the World Benchmarking Alliance found that only a ‘minority’ of companies were engaged with the concept. Research from the We Mean Business Coalition found that the topics of Just Transition and Climate Justice were the least developed in Transition Plans.
The TPT’s guidance references the importance of a Just Transition under their first recommended stage, ‘Baselining’, by requiring organisations to analyse the interdependencies between their climate action plan, the natural world and various stakeholders.
Just Transition; the How?
There is no singule formula for approaching a Just Transition within your Transition Plan. The impact a business has on society and environment is unique and context-dependent. A Just Transition will look different for everyone. The TPT’s guidance does not offer a strict approach, meaning it is important to consider the individual context of an organisation.
Further guidance and resources for best practice can be found via the following;
- The International Labour Organization
- The Climate Action 100+ company benchmark
- The UN Global Compact; Business Brief for a Just Transition
At Corporate Citizenship we are working with our clients to understand what a Just Transition looks for their specific business, by following four key action steps; Assess, Engage, Act and Amplify.
Organisations must consider the activities and elements that link together to create their value chain, accounting for the different contexts in which they are operate. Evaluating this allows for a unique perspective on how transitioning to a low-carbon economy may impact specific communities. For example, an organisation choosing to divest from fossil fuels should consider how to manage the potential unintended consequences of this.
Once you have assessed the risks, the next step is communicating with those identified groups or individuals who may suffer unintended impacts. A Just Transition prioritises inclusivity; and this step will again look different depending on context. Approaches may include running upskilling programmes or stakeholder dialogue forums, or establishing funding schemes to support implementation of the plan. Supporting low-carbon initiatives not only within your direct operations, but more widely in regions affected by decarbonisation, is an example of how your organisation can facilitate change on a wider scale, as guided by a Just Transition.
With a well-crafted plan in place, its then time to execute. Developing Guidance from Glasgow Financial Alliance for Net Zero (GFANZ) suggests three sub-elements within an organisation’s implementation strategy; products and services; activities and decision-making; and policies and conditions. Considering how actions can be taken across these elements is a useful starting point. Setting specific metrics or KPI’s by which to measure your impact on society is another important step in reinforcing your commitments. This could include targets for sustainable jobs generated through your Transition Plan.
A Just Transition relies on pioneering companies who want to be at the forefront of change, and raise awareness through their work. Demonstrating a public commitment to principles of a Just Transition through a formal policy position, or an engagement strategy which partners with relevant workers and communities, shows a willingness to dedicate resources towards climate action.
London Climate Action Week is a call for businesses and organisations from all sectors of society to come together to deliver on the goals of the Paris Agreement, prioritising transformation on both an economy and society-wide level.
At Corporate Citizenship (part of SLR), we are well-positioned to understand your business’ needs, with vast expertise across industry sectors. The importance of considering a Just Transition within your Transition Plan cannot be overstated, so keep an eye out for more guidance on this from us over the coming weeks.
Get in touch with us today to discuss all elements of Transition Planning and Just Transition.