The power of the collective to unlock just transitions

As the world grapples with the urgent need to decarbonise sectors and economies, philanthropy, business, finance, and media can play a critical role in ensuring these transitions are inclusive and equitable.  

Hot on the heels of Climate Week NYC, where the topic of just transitions created a lot of buzz, we invited a diverse set of voices representing philanthropy, business, finance and media to unpack their respective views and efforts to advance just transitions at the pace required. I was delighted to welcome Liz McKeon, Programmes Director – Planet, IKEA Foundation; Zeeshan Suhail, Social Impact Manager, Nestlé; Bella Landymore, Co-CEO, Impact Investing Institute; and Katie Fowler, Responsible Business Director, Thomson Reuters Foundation to this conversation.  

A shared understanding of just transitions 

At the outset, a common reflection among our speakers was the absence of alignment on what the term just transition represents or means.  

According to the International Labour Organization, 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. While many heavy emitting industries are on their respective journeys to more climate-friendly practices, a just transition underpins the critical need for the transition to consider the social impacts of a climate transition. 

The panel observed that while it is commonly associated with the shift to net zero and the creation of green jobs, there are multiple, simultaneous transitions occurring that need to be addressed. Katie described how “just transitions account for a broad array of risks and challenges. For example, ensuring sustainable livelihoods for populations who have been displaced due to climate emergencies such as cyclones, flooding, and riverbank erosion.” 

Philanthropy: the north star 

There is a need for philanthropy to fill a leadership void to ensure that climate transitions are both fair and can happen at pace. Liz proposed that “philanthropy has to function as a guiding star, by which to navigate very rough and choppy waters or else no one will reach the shoreline.” 

Liz noted that philanthropy can exercise its influence across three key arenas. Firstly, industries and companies need to compete on a level playing field in a transforming economy; this means ensuring standardised structures are in place for verifying emissions-reduction targets and that performance against these targets can be validated.  

Secondly, macro-economic policy must be fit for a low-carbon world; this entails questioning the use of legacy government subsidies for industries such as energy and agriculture, which contribute to elevated levels of carbon emissions. Liz warned that “Subsidies are not preparing us for the future economy we need” and must be unwound at pace, albeit fairly.  

The third arena concerns people and society. To win over hearts and minds, there must be a greater understanding of the need for transition, but also a wider commitment that those affected will be protected. Liz believes the current lack of participation can be attributed to a lack of clear communication, the failure to deliver on promises – such as the Paris Agreement – and climate denialism in the face of almost daily weather events.  

By being tenacious, steadfast, and aligned, Liz suggested that philanthropy can pose the provocative questions and establish the frameworks needed to set the pace for just transitions. She adds, “Otherwise we will not realise the quality of life for most people on this planet that we need to live in a low carbon environment and continue to thrive.” 

Narratives: advocating for truth 

The power to convert hearts and minds, as well as inspire decision-makers to act, is in the hands of the media. Against a backdrop of often negative public perception, Katie believes the integrity of independent journalism is paramount. 

The emphasis on solutions-driven journalism means rather than advocating for one side of a debate or another, it focuses on the truth by telling unbiased stories about the climate transition that is underway. Katie stated, “The most effective way we can report on the just transition is by elevating the voices of the people with lived experience of the issue. We are really not in a position to drive a particular narrative, but we can write well-researched articles about the winners and losers of just transitions.”  

The effectiveness of journalistic impact can be seen by surges of awareness on a particular topic or by monitoring shifts in the policy landscape. Katie commented that the prominence of just transitions in central discussions at COP 23 can be attributed to greater media coverage, and that the promotion of this theme also led to the United Nations Framework Convention on Climate Change outlining specific just transition pathways.  

Moreover, at a national or regional level, investigative journalism can be measured against specific actions. For example, an article from Thomson Reuters Foundation’s media platform, Context, on Bitcoin mining and green power was referenced by US Senator Elizabeth Warren in a letter to the CEO of the Electric Reliability Council in Texas seeking information on how crypto mining impacts local residents. Similarly, a piece on subprime crypto carbon assets led to the removal of accreditations by carbon offset certifier Verra.  

To positively sway opinion on just transitions, Katie believes narratives must “represent people at the very centre of the impact, because nothing is more authentic or relatable.” 

Business: bold and inspiring leadership 

The role of business to provide solutions and be leaders of change for just transitions is challenging. Liz observed that many companies are retrenching on commitments as they struggle with how to implement ambitious targets against a backdrop of increasing ESG scepticism. However, Zeeshan reinforced the importance of businesses remaining in the driver’s seat, and being steadfast in the face of backlash and criticism when it comes to just transitions.  

He explained that for Nestle, the just transition journey began several years ago before the concept became ‘capitalised’ and mainstreamed. Two-thirds of the company’s Scope 3 emissions come upstream, often through smallholder farmers, therefore it recognised that food systems would need to become more regenerative with fair and equitable solutions in place for farmers of all scales to ensure no one is left behind.  

As an example, Nestle facilitated the shift to more sustainable dairy farming practices in Pakistan by collaborating with the local government to supplement subsidised programmes to install irrigation systems as well as gas-fuelled biodigesters as part of an initiative to increase productivity, reduce emissions, increase productivity and conserve water. Other ongoing programmes in the cocoa and coffee sectors were subsequently aligned with similar ambitions and frameworks incorporating just transitions.  

Similarly, Nestle’s income accelerator programme has shown promising results in Cote d'Ivoire since it was launched two years ago and there are plans to expand into Ghana. Zeeshan expanded, “This CHF multi-million investment across different sectors not only empowers farmers, but also supports gender equality and even provides incentives to educate children.”  

While Nestle has created these conceptual frameworks, it recognises that it cannot implement change alone. Zeeshan outlined Nestle’s philosophy on collective action, which sets high standards to inspire others to follow. He said, “Bold leadership is certainly the call of the moment. We recognise that for our net zero plans to stay on track, this transition needs to be just and equitable. 

Finance: Show me the money 

One of the toughest challenges to closing the gap between dialogue and action on just transition will be the mobilisation of the USD 185 trillion the UN estimates is needed to achieve the net zero by 2050. Bella outlined why impact investing can help transform capital markets, so they support a fairer, greener, and more resilient future. 

While the rationale for climate investing has a sound economic argument, there remains a gap between targeting climate and enabling a just transition. Of the circa USD 2 trillion invested in climate finance globally, Bella conceded that there are hardly any investments with the outcomes of people and communities in mind.  

A major initiative for the Impact Investing Institute is to ensure capital providers start putting just transition outcomes at the heart of what they do. By working with 28 (and counting) global asset managers and owners, it has created a Just Transition Criteria tool that enables funds or strategies to seek clear climate and environmental outcomes, clear social outcomes, and clear community outcomes. 

As an example, Bella highlights a product that provides insurance to smallholder farmers to protect them against the effects of climate change. She says, “This product ticks both the environmental and climate boxes, and delivers on social outcomes. As smallholder farmers, they need products to be accessible and suit their specific needs. 

In terms of mobilising greater climate finance, Bella suggests we need to rethink the tools used by governments to pull in private capital to create bigger pools of blended finance. However, she also acknowledges that impactful government spending often is not counted as impact investment. She adds, “Those of us who are impact advocates need to encourage the increasing awareness and understanding of impact, while not being too strict about what is and isn't impact investing, as the scale of the capital required and the sources from which it's needed are too great to be too restricted.” 

Uniting just transition approaches 

The insightful and varied observations of our speakers underlined the complexity of just transitions. A broad-brush approach is often taken when place-based considerations might be more effective.  

Liz observed that learning from real-life, placed-based experiences should be harnessed more widely to inform future actions. “Some of the things we have learned so far have been extraordinary, but it is a drop in the ocean. We need to begin creating and sharing a library of knowledge of what is working. Our role is to elevate what can be transferred and shared between communities in different countries.” 

To build such a knowledge bank, Laudes – along with Wallace Global Fund and Ford Foundation – commissioned Climate Horizons to conduct mapping and trend analysis on just transition initiatives. This toolkit enables organisations, actors and initiatives to find strategy-aligned initiatives to drive faster, more ambitious climate action, address structural inequalities, and ensure a truly just transition.  

In addition, Laudes and IKEA Foundation have formed a learning and action space for donors called the Just Transitions Donor Alliance. This initiative aims to establish a set of principles to broadly capture the core elements of just transitions, drive a common understanding of what good looks like and ensure that all transitions are just and happen at pace and scale.