Towards a Just Transition: maintaining livelihoods under sustainable production
Just Transition is a framework put together by the trade union movement to ensure that workers’ rights and livelihoods are maintained as production changes to more sustainable models as part of the fight against climate change. It commands broad support from, among others, the International Labour Organization (ILO), the United Nations Framework Convention on Climate Change (UNFCCC) and the European Union.
When did it start and why is it necessary?
Somewhat obviously, the reduction and in some cases ending of certain types of work needs to be brought about in a way that minimises harm to workers involved in those industries. In that context, the term was first used by North American unions in the 1990s. It is a form of economic conversion, a concept that originated to describe the move from military to civilian markets, applied to ecology. Its current iteration was included in the 2015 Paris Agreement on climate change.
A woman holds a Just Transition sign at a rally. Photo: Lori Shaull/licensed under Creative Commons 2.0
In the words of the International Trade Union Confederation (ITUC), a Just Transition means that “carbon dependent communities and workers must not be forced to bear the costs of change”. Given the changes in the richer economies in the last 40 years, such as in the area of coal mining, which has all but disappeared from British industry, but is still a large employer in other parts of Europe and the Global South, ITUC is aware that there will be variation depending on the economies involved, but there are a number of broad principles that should apply everywhere:
Investments in low‐emission and job-rich sectors and technologies, which must be undertaken through due consultation with all those affected, respecting human and labour rights
Social dialogue and democratic consultation of partners (trade unions and employers) and other stakeholders
Research and early assessment of the social and employment impacts of climate policies. Training and skills development to support the deployment of new technologies and foster industrial change
Social protection, along with government intervention in the labour market
Local economic diversification plans that support decent work and provide community stability during the transition. Communities should not be left on their own to manage the impact of the transition
Global research project
Part of the London School of Economics, the Grantham Research Institute on Climate Change and the Environment launched a global project, ‘Investing in a Just Transition’, in February 2018. It is being delivered in partnership with ITUC and the Principles for Responsible Investment.
In many ways, it seeks to provide a bridge between the interests of business and labour through linking “investors to the broad array of policy, place-based, community, labour and business efforts to deliver a just transition and explore ways of empowering community and labour groups to effectively engage with investors”. What does this mean in practice? Here are the project’s three principal activities at this stage:
Explore the strategic case for investor action on the just transition in terms of factors such as risk, opportunity and investor responsibility.
Produce draft guidance for investors and the just transition, based on emerging practice, covering aspects such as shareholder engagement, capital allocation and policy dialogue. The final guidance will be presented at the COP24 climate conference in December 2018.
Generate recommendations for policy, market and community-level approaches that identify and enable effective investor contributions to the just transition.
Just Transition in the UK
As part of the global project, the Grantham Research Institute has designed a dedicated one for the UK, which is being implemented in partnership with the University of Leeds, and which uses Yorkshire as a pilot case study in order to consider the transition risks and opportunities facing regions. An Initial Landscape Review was published in February 2019 and a Roadmap for Investors in October of that year. Looking at the Yorkshire pilot’s aims will give us a picture of how Just Transition works in practice. It is:
Surveying the UK policy and investment landscape, mapping high-level transition exposure across the country and identifying the specific case for investor action
Analysing transition risks and opportunities and working with local stakeholders to develop a place-based agenda for the just transition
Working with financial institutions to apply the framework for investor action in a series of Yorkshire-based examples, covering shareholder engagement, capital allocation and policy dialogue
Identifying how to strengthen the role of investors in financing a just transition in Yorkshire, including building up a pipeline of investable assets, highlighting any barriers that are preventing this
Developing a national roadmap for investing in a just transition, setting out the lessons of the Yorkshire pilot for other regions, how investors can bring together the environmental and social dimensions of their climate strategies and what policy reforms are needed to ensure that the just transition is embedded in the financial system
Given the region’s historical dependency on coal mining and steel, and the obvious need to rebuild the economy after years of deindustrialisation, it is clear why it was chosen; indeed, along with both the West and East Midlands, it’s one of the three regions with the largest proportion of jobs that could be exposed to the transition. Overall, around a fifth of UK workers have skills for which demand may grow in the green economy or will require reskilling; in the three regions highlighted, that figure will be higher.
Moreover, there are opportunities for investors, hence why the project puts such emphasis on that side of the equation, with five areas of action: investment strategy; corporate engagement; capital allocation; policy advocacy and partnerships; and learning and review. Overall, from the investor perspective, it’s about understanding systemic risk, contributing socially and uncovering investment opportunities.
Overall, Just Transition is a key pillar of climate strategy, reflecting the “growing realisation that the immense scale and speed of the economic transformation necessitates an active social dimension”. The worry is that it will become an afterthought, not an essential element of any Green Industrial Revolution.
But if we are to move the majority of people towards a Green economy that pushes Net Zero Carbon by 2050, then it is absolutely essential that they see a bright future for themselves and their communities. While ITUC is right to point out that ‘there no jobs on a dead planet’, there’s also no living planet without jobs for the people on it. Just Transition, including the research being done at the LSE, is a very important element of getting this right.