Let’s start with a little thought experiment: imagine what our world will be like in 2030. The vast majority of communities, organisations and governments around Europe have transitioned to a low carbon economy.
In order to get there, what have been the crucial steps needed to ensure this monumental global focus on eradicating the use of fossil fuels created effective and long-lasting positive change for the better?
A ‘just transition’, simply put, is how we can achieve this; a way of equitably distributing the costs and benefits of climate action so that no one is left behind or disadvantaged.
The European Union has designated €55bn to fund a Just Transition to a future which transforms the way we run countries, operate businesses and live our lives but crucially doing so with sufficient thought given to the whole of society, especially those that are at risk of being negatively impacted. The transition to a more sustainable economy is an urgent necessity, but it must be done in a way that ensures that the benefits and costs are distributed fairly.
“The renewable energy transition offers a once-in-a-lifetime opportunity to correct the mistakes of the fossil fuel era. As we continue to push for net-zero technologies, let’s remember that sustainability isn’t just about the environment, it’s about equity. True sustainability means a future where all communities benefit from the energy transition.”
Global Witness
What does this mean for businesses?
Businesses are a critical part of the global transition to net zero and therefore can have a significant impact and influence that will help determine whether a just transition becomes a reality. Whether it’s by taking into account where hard-to-mine materials are coming from that are needed in new technologies such as solar panels, electric cars and batteries or by carefully considering changes to land and communities that will be necessary to supply clean energy.
For organisations in high transition or high impact sectors such as energy, agriculture and infrastructure, demonstrating steps that have been taken to plan for a just transition are going to be increasingly important.
Any business with a Net Zero strategy or transition plan should be considering how it can help contribute to a just transition.
It is also worth noting that larger B Corp organisations will be required to have considered a just transition in the new standards that are being introduced.
In this article we’re going to explain what a just transition is, why it’s important and what lessons can be learned from recent projects.
What is a ‘just’ transition?
The term “just transition” began life by North American trade unions in the 1970s and 80s in response to more stringent air and water pollution regulations. It originally described the need for workers to be provided with support and funding to ensure a transition away from industries harmful to the human health of their workers and the broader environment. Subsequently, the concept has come to mean an equitable transition from a high-carbon to a low-carbon economy.
But what do we mean by “just”? We know the energy transition necessitated by climate change will impact our society unevenly. One key aspect of the transition involves the closing down of fossil fuel industries and potential negative impacts (including, but far from limited to, loss of livelihood) for workers, communities and stakeholders around those industries.
A just transition aims to bring about fairer outcomes for groups that are or could be impacted and prevent inequalities arising from the huge changes that will be needed in coming years. This can also include accounting for economic, environmental, social and cultural-historical context and impacts.
Overall, a just transition aims to fairly distribute the costs and benefits of climate action and minimise negative consequences for workers, communities and other stakeholders.
What is an ‘unjust’ transition?
The South Wales Valleys was historically one of the largest coal producing regions in the world.
Back in the mid-1980’s communities in Wales were heavily dependent on coal mining, which still provided a major source of employment and in many cases had been the nexus around which a town or village had been founded. It was a complex situation with impending privatisation, unions seeking to protect workers rights, and families wanting security for their future. After an intense period of political and social turmoil, many Welsh coal mines were closed which plunged tens of thousands of workers and their families into economic uncertainty. The effects of this are still being felt today.
An example of a just transition
Ireland’s peatland industry has a long history, providing employment and economic benefits to many communities. However, peatland extraction is a significant contributor to greenhouse gas emissions, and the Irish government recognised the need to transition away from this unsustainable practice to meet its climate goals. The challenge was to do so in a way that would minimise the negative impacts on affected communities and ensure a just outcome.
Ireland’s approach to this transition involved a combination of policy measures, stakeholder engagement, and economic diversification. The government provided financial support to communities affected by the closure of peatland extraction sites, and it invested in new industries and job training programs.
What can we learn about creating a just transition?
- Stakeholder engagement: One of the key lessons from Ireland’s experience is the importance of stakeholder engagement. The government worked closely with communities, businesses, and other stakeholders to develop a transition plan that was acceptable to all parties. This helped to build trust and ensure that the transition was carried out in a fair and equitable manner.
- Holistic understanding of the impacts: The impacts of any large-scale change are likely to encounter significant environmental, social, economic and cultural issues. A robust transition plan would look to purposefully understand and mitigate these impacts as best it can.
- Deliberate planning: A successful transition also requires structure and inclusive planning and not simply a starting plan based on theoretical assumptions, but rather continuous and full engagement with those involved.
- Long-term perspective: A just transition is not a quick fix; it requires sustained effort and investment over many years. Ireland’s government has demonstrated a commitment to this process, and it is clear that the benefits will continue to accrue in the years to come
Just transition provides an opportunity to dig deeper into the real impacts of your climate transition plan, fully understand impacts throughout the value chain, and involve stakeholders in the transition to ensure they can ultimately create a low carbon future in which their communities can thrive.
If you want to ensure your company’s climate plans are likely to lead to equitable outcomes our social and environmental experts are on hand to help. You can get in touch at contact@greenheartbusiness.com.
