Our key takeaway: Financial institutions have a key role to play not only in enabling the shift to a net zero economy, but also in ensuring that transition is just for workers, communities and consumers. Banks and investors increasingly acknowledge the centrality of this just transition, and many are now committing to action. Yet there remains a long way to go in translating these commitments into results. In particular, financial institutions have a responsibility to ensure their net zero plans reflect the just transition by building in a people-centred and rights-based approach to the delivery and implementation of those plans. These institutions must understand and effectively respond to the social risks and opportunities for people affected by their plans.
The Grantham Research Institute on Climate Change and the Environment has published “Making Transition Plans Just: How to Embed the Just Transition into Financial Sector Net Zero Plans” (October 2022). It offers a guide for financial institutions on “how they can incorporate consideration of the social dimension of climate action – in other words a just transition – within their net zero transition plans”: