The Race to Zero initiative launched Towards a Just Transition Integrating Fair Share, Equity and Justice into Climate Transition Plan (November 2025). The report is based on consultations with companies and experts.
Human Level’s Take:
- A just transition — the process of shifting towards a green, net-zero economy in a way that is fair, inclusive and rights-respecting for all stakeholders, particularly the most vulnerable — is a bedrock of effective, sustainable action on climate and the environment.
- It’s important for companies to embed a just lens in their climate transition planning, as perceived unfairness can trigger stakeholder resistance, social backlash and operational risks and disruptions.
- Integrating justice principles into climate plans helps companies manage risks, maintain social license, enhance workforce and supply chain resilience, reduce legal and reputational exposure, and build stronger relationships with communities and stakeholders.
- Race to Zero’s report offers some key recommendations for companies to embed a just lens, recognising that the lack of shared definitions and frameworks can make it a challenge to take action.
- First, companies need to define what a just transition means for their specific business, sector and region, engaging with diverse definitions to challenge assumptions and adapt them. Definitions should uphold core principles like reducing risks for vulnerable groups and addressing systemic inequities. Based on this definition, companies can set goals and KPIs to meet that vision.
- Second, companies can invest in building trust through inclusive, participatory stakeholder engagement with workers, local communities and others affected by the transition. This means prioritising dialogue that goes beyond one-way consultation to negotiation and collaboration.
- Third, funding for just transition should be treated as a core business investment, including allocating resources for training and capacity-building to implement just transition principles effectively.
- Finally, companies can use their political influence to advocate for policies that support a just transition, ensuring that net zero efforts consistently integrate justice principles.
Some key takeaways:
- Why does a just transition matter for business?: A just transition is crucial for climate goals and long-term organisational resilience. The report points out that the net zero transition will be highly disruptive, requiring transformational change across sectors, communities and countries. If this process is perceived as unfair, stakeholders may resist, leading to backlash, social anxiety, polarisation and eroded trust. Embedding a just transition into company’s climate transition plans can help stabilise the process, maintain corporate social license to operate, and prevent risks to business, such as community opposition or supply chain disruptions. Planning a just transition helps companies identify and manage associated risks and harness opportunities. Specifically, it can enable access to capital, business continuity, and workforce and supply chain resilience. It can also reduce litigation and reputational risk. Additionally, supporting a just transition allows companies to address historic inequities and build stronger relationships with communities, stakeholders and consumers.
- Just transition barriers for companies: A key barrier to advancing a just transition is the lack of consistent definitions and shared frameworks, leaving companies unclear on their role and how to act. This ambiguity hinders stakeholder collaboration, makes it difficult to translate commitments into measurable strategies, and risks fragmented or inconsistent initiatives. Without common language, companies also struggle to align policy, operations, supply chains, and community needs, which can limit effective implementation. Another barrier is a top-down approach to defining and implementing just transition initiatives. Many companies have treated just transition as a top-down initiative, often led by corporate teams with limited involvement of stakeholders on the ground, like workers and local communities. This approach limits internal buy-in, overlooks operational insights and risks plans being seen as an external obligation rather than a company-wide strategy. The report also highlights that companies are hindered by the absence of accountability systems and practical metrics to measure success, coupled with data gaps. All of this can make it difficult for companies to set concrete strategies and assess whether they have met their goals. In addition, financial barriers are one of the most common challenges that the report’s authors came across in consultations. High upfront costs and limited funding, coupled with a lack of clear financial incentives, constrain companies from prioritising and implementing just transition strategies. This is especially difficult for smaller companies. A final barrier identified by the report is that many just transition efforts remain top-down, with limited meaningful engagement of workers, communities and affected groups. Stakeholder engagement across supply chains is also limited, risking reinforcement of systemic global inequalities. Overall, these gaps hinder the design of inclusive, equitable and effective transition strategies.
- The way forward: The report identifies pathways forward for companies to better understand and embed a just transition lens into their climate transition planning. In the absence of a universal definition of just transition, companies will need to come to an understanding about what this means for their business, sector and geographical context. The report recommends that companies engage with diverse definitions of “just transition” to challenge their own assumptions and work more effectively with stakeholders who might have different definitions. Existing definitions can be adapted to be sector-appropriate while still upholding core principles, such as reducing risks for vulnerable groups and addressing systemic inequities. Another key recommendation is for companies to build trust with their stakeholders through inclusive, participatory mechanisms that engage stakeholders in co-creating just transition plans. Senior leadership and boards will need to back more meaningful dialogue that goes beyond one-way consultation to negotiation and collaboration. This approach strengthens management capacity, fosters respect, and ensures justice considerations are integrated across all levels and stakeholders. In addition, companies will benefit from treating funding for just transition as a core business investment, not philanthropy. They can do this by allocating resources for training and capacity-building on how to ensure a just transition in climate planning. Finally, companies can leverage their political influence to promote policies that support a just transition, ensuring net zero efforts consistently incorporate justice principles.
