Tapping into the transformative power of business and industry to drive just transitions
“If this is not a social Green Deal, the Green Deal will not happen.”
These were the words of Frans Timmermans, then EVP of the European Commission for the European Green Deal, in 2019. At last week’s Climate Week NYC, they were echoed again by Luc Triangle, General Secretary of our partner ITUC, and they still ring true today.
We have a gargantuan challenge before us to decarbonise our world in a way that restores nature and leaves no one behind.
As UN Climate Change Executive Secretary Simon Stiell remarked at the week’s start, "Decarbonisation is the biggest transformation of the global economy of this century. But we are at risk of entrenching a two-speed global transition.”
In other words, while transition presents a very real opportunity to protect both people and planet, we are seeing money flow mainly to wealthier countries and not to countries that need investment to enable more resilient global supply chains and support vulnerable communities.
The pivotal role of business and industry to accelerate just transitions
As a foundation that supports brave action which enables industry to transition to green, fair and inclusive economies, we see that despite this complexity, there are points of light in how the various actors are working to accelerate the just transitions we so desperately need.
Particularly encouraging is some of the progress showcased amid a confronting yet inspirational Climate Week NYC.
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Business leaders are increasingly committing to net zero. As We Mean Business Coalition marks its first ten years, to date it has mobilised over 16,000 businesses, representing over half of the world’s market capitalisation, to do so. Of particular note is their Just Transition Resource Platform, designed to support businesses with tools to navigate their just transition journey.
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Investors are increasingly looking to incorporate social considerations into investments. The Laudes Foundation-supported Taskforce on Inequality and Social-related Financial Disclosures (TISFD) launched to help create more transparency on social impacts, risks and opportunities.
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Policymakers, particularly those in city governments, are also playing an important enabling role. One of the finalists for the WRI Ross Center Prize for Cities, The Climate Budget in Oslo, is integrating emissions tracking into the municipal budget process, and is supported in its construction sector efforts here by our partners C40 and Carbon Neutral Cities Alliance.
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Philanthropic foundations, small yet catalytic in our efforts, are also stepping up. Laudes Foundation hosted over 70 philanthropic and non-profit leaders to collaborate on just transitions. We also convened a new global multi-donor alliance to tackle one of the harder to abate sectors – the built environment – and enable an inclusive pathway to 2050.
But we can do better. As the Potsdam Institute’s Johan Rockström reminds us, we face increasing urgency to do so. Climate Week NYC saw the launch of first planetary boundary health check, and the news is not good. We’ve transgressed six out of nine planetary boundaries, signaling that we are nearing the limits of our planet’s capacity to sustain human life. “This is much more than science,” said Rockström. “…this is science for change.”
So where can we go from here?
We need more brave and bold action by industry and finance in order to accelerate the just transitions we need. This means we need to:
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Make it inclusive. Not only should we be including the voices of all those impacted, but also recognising (and enlisting) their agency and decision-making. We have supported partners such as the World Economic Forum and Boston Consulting Group to develop some thoughtful frameworks on what equitable transitions can look like.
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Make it physical. Climate and nature risks quickly translate into physical risks (flooding, supply chain disruptions, extreme heat, drought, etc.). Making this visible and tangible can spur action. Such risks also translate into economic opportunities like adaptation investment, the innovative extreme heat insurance scheme enabled by our partner Climate Resilience for All, is a good example.
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Embrace ingenuity. What got us here won’t get us there. And it’s inspiring to see the flurry of innovations throughout Climate Week NYC - from the Earthshot Prize finalists to intrapreneurship initiatives like Hurd as well as the Laudes Foundation-supported Built by Nature Prize winners being celebrated. At the same time, we need to be careful to not always chase what is shiny and new. We also need to invest in scaling that works.
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Act within the system. Just as the planetary boundary health check shows us the physical interconnections across the earth system, our global economic system is deeply interconnected. That’s why we support partners – like the central bank-led Network for Greening the Financial System or The Just Transition Finance Lab – to influence how finance flows through the system. It’s clear we need to unlock trillions in (just) transition finance, and investors across the continuum of capital (from concessionary capital to mainstream finance) have a role to play.
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And make it business critical. As Peter Bakker of WBCSD said last week, “This is not about saving the world. This is about saving your business.” And if done in a way that is inclusive, we just might have a chance to save the world.
We, at Laudes Foundation, stand ready to accelerate this process.
Main image courtesy of World Economic Forum
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By Leslie Johnston
CEO, Laudes Foundation
