The World Business Council for Sustainable Development (WBCSD) developed the Business Leaders Guide to a Just Transition (November 2025), building on insights shared by more than 50 companies and expert organisations under WBCSD’s People Action Team, with support from ERM.
Human Level’s Take:
- WBCSD points out that the climate transition is a people challenge: both climate impacts and corporate mitigation actions can harm workers, communities and consumers, creating social risks that ultimately threaten business resilience and performance.
- Ignoring or overlooking risks to people as a result of climate transition planning can pose risks to the business, while integrating people considerations into climate planning can lead to opportunities such as stronger competitiveness, talent retention and customer loyalty.
- For example, managing workforce disruption can both ensure the health and livelihoods of workers while also mitigating business disruptions, reducing costs and enabling innovation. Ensuring local communities are not harmed by asset closures and new infrastructure projects can minimize risks of litigation, project delays and reputational damage. And, creating affordable, inclusive products and services while ensuring supply chain resilience can both benefit consumers and enhance brand value.
- This means that just transition planning becomes essential both to the business and to the people it touches. WBCSD underscores that a just transition is not a separate agenda, but the integration of people factors into existing systems, functions and decisions.
- The report outlines six just transition planning principles for boards and executives: (1) Set a clear vision with strong top-level oversight and accountability. (2) Use a cross-functional approach to ensure informed planning and effective implementation. (3) Embed just transition considerations into core strategy, management systems, and climate plans. (4) Track and report progress through goals, targets, and metrics that enable adaptation. (5) Engage affected people continuously, especially vulnerable groups, to understand impacts and support inclusion. (6) Partner with value chain actors, governments and civil society to address systemic risks and co-create sustainable solutions
Some key takeaways:
- The business case for a just transition: According to WBCSD, the climate transition is fundamentally a people challenge: climate change and corporate mitigation actions can disrupt lives and create social risks that, if ignored, threaten companies’ resilience and performance. At the same time, integrating people considerations into climate planning can be better positioned for new benefits and opportunities of the transition, like enhanced competitiveness, talent retention and customer loyalty. In a context of climate-driven instability, technological disruption and geopolitical volatility, boards and executives are expected to take ownership of these social dimensions. Climate change poses risks to the business, via transition risks that arise as regulation, financing criteria and stakeholder expectations that evolve, and physical risks that come from the direct physical impacts of climate change on company operations and value chains. Transition and physical risks can also pose risks to people, including employees, value chain workers, local communities and consumers. This can be in the form of “inside-out” impacts, resulting from companies’ mitigation and adaptation strategies, and “outside-in” impacts, resulting from factors that are outside of the company’s climate strategy. Climate-related risks, impacts and opportunities for people can show up in a number of ways, also creating risks and opportunities for the business. For example, when it comes to the workforce, decarbonisation will disrupt jobs, while climate change and extreme weather will expose workers to health and livelihood risks. This presents opportunities for proactive reselling, recruitment and retention strategies and support for community adaptation, all of which can help companies mitigate operational disruptions, reduce costs and promote innovation. When it comes to communities, asset closures and new projects can result in job losses, reduced tax revenues and land-use conflicts. Meanwhile, approaches like site reuse, diversification and environmental and social impact management can help companies avoid delays, litigation and reputational risks while supporting community resilience. In the case of consumers, factors like supply chain shocks and increased energy costs can increase costs while supply chain disruptions can limit access to essential goods and services. Companies have an opportunity to both protect consumers and enhance their brand value by prioritising affordability, inclusive products and services and strengthen supply chain resilience.
- Climate transition planning is a key vehicle for just transition: The report points out that climate transition planning is a crucial component of business planning, touching capital allocation, R&D, product design and operations. Climate planning should therefore be integrated into companies’ core strategy. Because it requires impact assessments, stakeholder engagement, and strong governance, transition planning is a fitting place to embed people considerations. WBCSD emphasises that the just transition is not a new topic or agenda item — rather, it should be seen as integrating ‘people’ factors into existing systems, functions and decision-making processes. Different company leaders have essential roles to play in advancing just transition considerations in climate planning. Company boards can provide governance and oversight of key climate- and nature-linked social risks, impacts and opportunities, while the CEO and executive team can ensure the company identifies and proactive manages these risks, disclosing them as part of its climate strategy and human rights commitments. The Chief Financial Officer oversees identification and reporting of climate-and nature-related risks to people, while ensuring adequate resourcing to tackle these risks. The Chief Sustainability Officer provides direction and coordinates the work across the company, with accountability for identifying, prioritising and managing just transition risks, impacts and opportunities. The Chief Risk Officer is expected to integrate just transition risks, impacts and opportunities into enterprise risk management and ensure they are part of the corporate risk register. The Chief Human Resources Officer serves as a “steward” of people and culture across the organisation, ensuring the workforce is prepared to navigate the transition.
- How to integrate people into climate transition planning: WBCSD outlines six guiding principles for boards and leaders to consider when planning for a just transition. (1) Set a clear vision for just transition planning, alongside oversight and accountability structures at top levels of the company. (2) Take a cross-functional approach by ensuring collaboration across different functions, enabling both informed planning and effective implementation. (3) Integrate just transition considerations into business strategy, core management systems and climate transition plans. (4) Track and report on progress, setting goals, targets and metrics to track performance and adjust to evolving expectations and climate conditions. (5) Continuously engage people who could be affected by the company’s climate transition plan in order to learn about impacts and share information, focusing on the most vulnerable groups. The ongoing nature of stakeholder engagement is a key differentiator from other types of business planning, as it is essential to address inequality and create social inclusion. (6) Work with value chain partners, governments and civil society to manage systemic risks and develop sustainable, effective and just solutions.
