Advancing Credible and Robust Just Transition Plans

Transition plans provide a strategic roadmap for an organisation to realign its assets, operations, and business model to meet climate goals. Although not a novel concept, the specificity and urgency of climate transition plans make them crucial for an organisation’s future viability.

While there is a shared understanding of the use of transition plans, consensus on the definition of their components, including their aims, audience, scope, content and format, is lacking. As a result, debates on the relevance of transition plans to regulatory objectives are commonplace, which creates confusion. Yet, these plans are essential for several stakeholders, such as companies, financial institutions, governments, investors and regulators, to meet different objectives in net-zero planning.

It is also imperative for financial and non-financial firms to include just transition perspectives, such as anticipating, assessing, and addressing social risks and opportunities of the transition, within transition planning. Broadly, a just transition involves greening the economy in a fair and inclusive manner, creating decent work opportunities and leaving no one behind. It maximises social and economic benefits while effectively managing challenges through dialogue and respecting labour rights.

This paper highlights the current issues in just transition planning and offers recommendations to resolve them. 

(Admitted as an official input paper for the G20 Sustainable Finance Working Group during the Brazilian Presidency)