We developed a Just Transition Tool for banking and investing activities in partnership with the International Labour Organisation (ILO) and the Grantham Institute of the London School of Economics.
Our pathway to net zero and climate resilience requires a profound transformation of our economy. This transformation implies a transition process, which is already impacting a range of sectors, regions, and communities.
The international community is increasingly recognizing that a transition process should be equitable and fair for all, with the term ‘Just Transition’ been coined to reflect that vision. A Just Transition means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities, and leaving no one behind. Importantly, the Just Transition describes not only where we are going, but also how we should get there.
As Financial institutions (FIs) are expected to play a pivotal role in stimulating a Just Transition, they should ensure that affected businesses, employees, consumers, and communities are considered and supported. However, guidance on how FIs should contribute to a Just Transition is only now emerging. So, what should FIs do to adequately embed Just Transition considerations in operations? And how can FIs monitor and report on their commitments and performance towards a Just Transition?
The Tool provides eight practical steps for FIs to embed the just transition in their operations, with tailored recommendations for Banks and Investors. For more detailed background on definitions and approaches to embedding the just transition, please access the Tool here.