The Organisation for Economic Cooperation and Development (OECD) released its guidance on Responsible Business Conduct for a Just Transition: Protecting Workers, Communities and Consumers in the Low-Carbon Transition (May 2026).
Human Level’s Take:
- Ensuring the ‘just’ in the just transition is more important than ever as climate change and climate action continue apace, but this is still a new area for many companies.
- The OECD’s guidance highlights that many companies are approaching social and climate planning in siloes and are not yet embedding effective engagement with affected stakeholders — two challenges that risk undermining the overall transition.
- In addition to integrated approaches and meaningful engagement, companies can advance the transition by conducting place-based risk assessments that consider cumulative impacts of multiple transitions over time (especially when regions are highly dependent on a single economic activity). They can use collective action alongside individual action where large-scale transformations are needed.
- And, they can develop benefit-sharing and co-ownership models with impacted workers and local communities to reduce conflict and share value fairly. Finally, the OECD underscores the importance of disengaging from a supplier or region only as a last resort and doing so responsibly.
- To jump-start a company-led just transition, the report recommends six core actions for business: integrate social planning into climate strategies; apply place-based and cumulative impact assessments; engage stakeholders meaningfully; combine individual and collective action; develop benefit-sharing models; and prioritise continuous improvement and responsible disengagement over abrupt exits from suppliers or regions.
Some key takeaways:
- Siloed transition planning and need for context-specific approaches: One of the OECD’s key findings is that many companies face barriers to integrating social and environmental considerations in their climate transition planning. This can be a result of internal siloes between functions, misaligned incentives or differing terminology between teams. While many companies are increasing citing a just transition in reporting, far fewer are actually planning comprehensively for social impacts. Positive progress on this is associated with senior-level ownership and clear internal accountability, with integration of social objectives into transition policies, targets and KPIs. The OECD also points to the importance of focusing on place-based and cumulative impacts of the transition, as impacts on people are context-specific and tend to compound where multiple changes happen at once. This is especially true when regions are highly dependent on a single industry that is disrupted by climate change or the transition. The OECD recommends that companies use risk assessments paired with a broader look at regional dependencies, national development priorities and cumulative effects across projects and value chains. This can happen through cumulative impact assessments, workforce mapping and consumer impact assessments.
- Stakeholder engagement, collective action and responsible disengagement: Another OECD finding is that not many companies are committing to consult with affected stakeholders when designing transition activities. Meaningful engagement happens early, reflects two-way conversation, and is adapted to specific groups. It can also happen through social dialogue and collective bargaining with unions and workers. The benefits of good engagement are multiple: it can increase trust between stakeholders and the company, reduce potential delays and conflicts, and strengthen transition outcomes. When addressing impacts, the OECD underscores the importance of collective action across companies, governments and other stakeholders to complement individual company-level action. This is needed for large-scale transformations and systemic support systems like social protection, workforce reskilling and economic diversification. Many companies are also deploying benefit-sharing and co-ownership models with impacted workers and local communities to reduce conflict and share value fairly. Finally, while disengagement from a region or supplier is a last resort, companies are expected to take steps to do so responsibly: assessing the impacts of leaving, planning a phased exit, and mitigating potential impacts to affected people.
- Six actions for companies: Drawing on responsible business conduct standards and current practices, the report lands on six actions for companies to advance a just transition. First, integrate social planning into climate transition planning by breaking down operational siloes, developing integrated strategies, having leaders set the tone from the top on an integrated approach, and clarifying terminology across business functions. Second, apply a place-based dimension and consider cumulative impacts when identifying and prioritising impacts. Third, engage meaningfully with affected stakeholders, using tailored approaches for different stakeholder views and managing divergent views by prioritising based on severity of risks to people and transparently sharing decision-making processes with all stakeholders. Fourth, take both individual and collaborative approaches to address impacts of the transition, which can include engaging with governments, engaging with peers and other actors collectively or as part of multistakeholder initiatives, developing collaborative and blended finance mechanisms, and supporting responsible consumer practices. Fifth, design and implement benefit-sharing models where possible. Sixth, work towards continuous improvement rather than cutting and running from high-emitting suppliers, and exiting responsibly only as a last resort.
