Business has a key role to play in planning, implementing and advocating for a just transition to a net zero economy.
This includes taking active steps to engage workers and affected stakeholders in decision-making processes through social dialogue and consultations; preparing their workforce by reskilling, upskilling and supporting redeployment; ensuring accessible and affordable products and services for a net zero future; respecting human and labor rights; advocating for just and inclusive climate policies; and co-developing solutions with workers and affected stakeholders.
This resource platform, developed by BSR, The B Team and the We Mean Business Coalition provides companies with the best available tools to navigate their just transition journey.
We would like to thank members of the We Mean Business Coalition Business & Just Transition Taskforce, representing BSR, CDP, Ceres, CLG Europe, Climate Group, The B Team and the World Business Council for Sustainable Development (WBCSD), for their engagement and continued support in developing this Platform. We also want to share our appreciation for the external organizations that provided feedback in the development process of this Platform including the Council for Inclusive Capitalism, the Grantham Institute on Climate Change and the Environment, the International Labour Organization, the Institute for Human Rights and Business, the UN Global Compact, and the World Benchmarking Alliance.
According to the International Labour Organization (ILO), 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.” A just transition can maximize economic and social opportunities for workers and communities through a process rooted in social dialogue, engagement, and partnership.
For businesses, a focus on the just transition safeguards organizations’ future success through steps to plan for and mitigate climate and societal risks, and will help maintain business continuity in the transition to net zero.
It can help improve business reputation and profile in the face of growing stakeholders’ expectations, from customers, employees, business partners, investors and policymakers. The just transition is one of the core components of a robust climate transition action plan, which investors and other stakeholders increasingly want to see.
The process is also an opportunity to build stronger relationships with local communities.
All businesses, regardless of size or sector, need to act on a just transition. However, each company will need a tailored approach based on their specific context. Transitions are unique to geography, industry, and business size and need to consider local economic, social, and environmental conditions.
In line with the 4 A’s of Climate Leadership, We Mean Business Coalition’s framework for credible corporate action, the Just Transition Resource Platform provides a step-by-step approach with relevant resources for companies to advance the just transition across their climate ambition, action, advocacy and accountability. For tools and resources covering every aspect of business climate action, visit: The 4 A’s of Climate Leadership.
The Just Transition Resource Platform is a concrete framework and repository of information for companies, leveraging a range of resources including from the UN Global Compact. It encourages greater transparency and accountability of just transition commitments.
Fernando Castellanos, Head of Environment and Climate, UN Global Compact
The Council is thrilled to have its Just Transition Framework for Company Actions included in the We Mean Business Just Transition Resource Platform, which serves as a key resource for companies delivering action on a just and inclusive transition to a net-zero economy.
Meredith Sumpter, CEO & President of the Board, Council for Inclusive Capitalism
The just transition is all about the how of climate action, making sure that net zero brings decent work, social inclusion and the end of poverty. This is the year when the just transition is at the top of the agenda, and this Platform will really help to speed implementation by bringing together the best guidance out there for business and finance.
Nick Robins, Professor in Practice - Sustainable Finance, The London School of Economics and Political Science
The results of our 2023 Oil and Gas Benchmark, assessing 100 companies in the sector, highlights the need for stronger engagement in dialogue with workers to plan for a just transition, yet only 35% of companies are committed to doing this. As a result of these findings, tools like this platform become more critical to the efforts in achieving a just transition in the energy sector.
Vicky Sins, Decarbonization & Energy Transformation Lead, World Benchmarking Alliance
Business has a key role to play in ensuring that the transition to a net zero economy is just. Actions to tackle the climate crisis can pose significant risks to workers, communities, indigenous peoples, and consumers. Respecting human rights throughout transition activities is key to preventing harm and minimising social conflicts that otherwise slow climate action. This Platform can help companies navigate an array of resources for getting started.
Haley St. Dennis, Head of Just Transitions Programme, Institute for Human Rights and Business (IHRB)
We are committed to the acceleration of a just transition that creates value and opportunities for all, centered on green job creation, workforce readiness, and the deployment of renewables and of innovative solutions for decarbonizing and re-industrializing the economy. The Just Transition Resource Platform can help your company get started.
Gonzalo Sáenz de Miera, Director of Climate Change & Alliances, Iberdrola
An ambitious corporate approach to the just transition starts with a public commitment, which pledges to pursue a just transition to net zero and co-create processes and solutions with affected workers and stakeholders.
Done right, this can inspire others to move the transition forward in the most sustainable way for people, business, and the planet. Such an approach can help deliver a positive vision for a net zero economy that is fair and inclusive, creates decent work opportunities, and advances human wellbeing and social equity. At the same time, it can improve business performance and resilience, and deliver emissions reductions in line with the 1.5°C limit.
This commitment should guide a company-wide approach, including strategy, resource allocation, employee empowerment and stakeholder engagement.
A publicly available commitment that is approved and understood at the most senior level of your company, and communicated internally and externally, is the first step to embed the just transition in your company’s strategy and operations.
Sign a corporate pledge:
Assess how workers, suppliers, and communities will be affected by your company’s transition to net zero, across operations, sourcing and investments. Consider the economic, environmental, and societal impacts of your company’s climate transition action plan. This includes its contribution to the economic development of regions where your company is operating, and other development issues such as inequality, gender, and energy access.
Meaningful engagement with affected stakeholders is essential to identify the solutions that work best for both the business and those impacted by its transition to net zero.
Ensure time and space for trust-building: Appropriate time for co-creating solutions with those most affected by your company’s net zero transition, within and beyond the company’s own operations, must be built into your planning frameworks. This will enable trust-building while sharing perspectives, insights, and ideas.
Engage and co-create locally: Just transition impacts are felt locally. Because of this, it is essential to prioritize the issues and solutions identified in consultation with workers, local communities, and other affected stakeholders in every country in which your company operates.
Collective global action is required to achieve a just transition. You can inspire your peers to act and give confidence to policymakers by sharing learnings, inviting collaboration, and leveraging your influence to encourage others to contribute to a just transition.
Share your learnings: Communicate your approach, initiatives, and learnings through public reporting, campaigning and case studies to inform and inspire your peers. Sharing progress and early lessons of successes and challenges can be an important contribution to inspiring and helping others on their journey. Contact us at [email protected] to feature on this platform how your company is addressing the just transition for others to learn from.
Identify needs for broader collaboration: Identify peers, partners, industry associations, NGOs, trade unions, and other actors that are important for you to engage with and/or that have influence in ensuring a just transition in your industry. Explore joint initiatives and/or projects to mitigate negative impacts and leverage opportunities for workers and other affected stakeholders in the net zero transition.
Leverage your influence to encourage others to contribute to a just transition: Collaborate and coordinate with your suppliers and business partners to mitigate risks and maximize opportunities for workers and communities throughout your value chain. Identify and develop the technologies required for your industry’s transition to net zero.
The next step to bring a just transition into reality is to deliver on the bold ambition set, through a process of innovation and transformation.
Done right, a just transition can unlock opportunities for businesses to thrive alongside the realization of social opportunities in the net zero economy, while mitigating against specific risks to people and business.
Ensure workers are informed and consulted on transition plans and initiatives on an ongoing basis so that they can benefit from opportunities brought by your company’s transition, such as access to skills, training programs and new job opportunities.
According to the ILO, social dialogue refers to the process of negotiation, consultation or sharing of information between workers and management or their trade unions and employers’ organizations (bipartite negotiations). It can also include government representatives, in which case it is called tripartite negotiations. The objective of social dialogue is to facilitate consultation and consensus building. The negotiations generally lead to binding outcomes such as laws, regulations, collective bargaining agreements or investment plans.
Consulting with external stakeholders is essential for capturing the diverse perspectives and needs of groups who may be involved and affected by your company’s transition plans.
Identify affected stakeholders: Identify key stakeholders that are affected by your climate transition action plan. These may include Indigenous Peoples, local communities, and civil society organizations. Integrating climate change considerations into human rights due diligence processes can help identify affected stakeholders.
Engage stakeholders: Ongoing and meaningful stakeholder engagement, including transparent communication with affected stakeholders, will help inform your company’s just transition priorities.
The OECD defines meaningful stakeholder engagement as characterized by “ongoing engagement with stakeholders that is two-way, conducted in good faith and responsive”, emphasizing the free expression of opinions and perspectives to reach mutual understanding; some shared decision-making and engagement in activities; the genuine intention to listen and learn and act accordingly; follow-through on outcomes and actions to address adverse impacts; and that stakeholder engagement is continuous.
The UN High Commissioner for Human Rights finds that “Businesses should conduct appropriate and adequate consultation on their own decisions and actions likely to have climate-related human rights impacts. For example, climate-related actions that risk impacting indigenous peoples’ rights must not be taken without their free, prior, and informed consent”.
A time-bound plan with interim milestones can help ensure your company implements its approach to the just transition, accelerating company actions and investments necessary to drive structural change.
Integrate learnings from social dialogue and stakeholder engagement: This will ensure your company strategy and plan for addressing the just transition are well informed by insights gleaned from stakeholder engagement and social dialogue and have stakeholder buy-in.
Determine priority issues: Based on the mapping of impacts, risks and opportunities, determine priority issues to address. Prioritize geographies, assets, and/or affected people and communities that are facing the highest transition risks. This may include expected changes in skill demand, job dislocation or shifts, or new practices and resource needs because of decarbonization efforts.
Conducting human rights due diligence can help your company to identify, prevent, and mitigate potential adverse human rights impacts related to your transition plan. Communicate your plan to your employees and with external stakeholders to gather further feedback and ensure buy-in before setting it in motion.
Establish good corporate governance to oversee your company’s just transition: Defining roles and responsibilities at all levels and across functions is important to establish clear corporate ownership of and responsibility for a just transition. It will help embed a strong company culture around just transition.
A cross-functional just transition committee representing relevant business units – including human resources, operations, procurement, public affairs, and social impact, among others – can help guarantee shared responsibility and bring relevant perspectives to the table.
Executive leadership awareness, approval of, and accountability for your company’s plan for addressing the just transition are also important for robust governance. This should be accompanied by board-level feedback mechanisms.
Ensuring input from affected stakeholders feeds into decision-making procedures will contribute to bottom-up as well as top-down governance of the just transition.
Develop Key Performance Indicators: Objectives and KPIs that are time-bound and measurable are essential to assess progress on just transition efforts and ensure accountability of your just transition commitment. KPIs should be based on the foundation of relevant data from impact assessments and stakeholder feedback.
Develop guidance for integrating the just transition in decision-making: Communicate to employees your company’s just transition commitment and what it entails, including the benefits of integrating the just transition into the business, and how KPIs affect functional responsibilities. Develop new or adapt existing guidance for employees to integrate the just transition into their work and decision-making.
Integrate just transition across your company’s operations: Develop new or update existing policies, standards, and commitments to reflect your company’s just transition position and priority issues. This helps to ensure that the just transition is integrated into operations, business strategy, informing future investments, resource allocation, and business development.
Organize training and capacity-building: Facilitate internal training and capacity-building to inform employees in relevant functions, assets, or departments – including those involved in the design and delivery of your net zero strategy. Help relevant employees to better understand just transition risks and opportunities and empower them to integrate stakeholder engagement and social dialogue into their work and decision-making.
Prepare your workforce through reskilling, upskilling and support for redeployment: Seize the opportunity to create, transform, and retain jobs that are green, decent and inclusive, and facilitate relevant education or training for the incoming workforce. This can be done by facilitating re- and/or upskilling of workers to equip them for future demand or transition them from jobs that will be phased out, and by supporting redeployment where possible. Where needed, responsible restructuring plans should be developed and implemented responsibly, in a way that contributes positively to the just transition.
Support and build on local just transition efforts: Implement your just transition plan locally for workers and local communities directly and indirectly impacted by your operations, building on local efforts, insights, and collaboration to implement meaningful action.
Support and collaborate with regional or country offices, worker representatives, governments, civil society organizations and other stakeholders to contribute to local efforts, including social protection for workers and affected stakeholders.
Enable others to contribute to a just transition: Build the capacity of your suppliers and business partners to enhance their ability to participate in social dialogue, support affected workers and communities in up- and reskilling and contribute to social protection. Some suppliers may be positively affected by the just transition and see opportunities to expand their business. Others, including smaller sized suppliers, can be negatively impacted and need support. Improving the just transition performance of suppliers can become an important aspect of a robust and publicly supported just transition plan.
Evaluate outcomes and impacts of just transition plans and actions: Conduct regular impact assessments in consultation with relevant stakeholders, including workers and communities directly affected, to understand and evaluate outcomes and impacts of just transition plans and actions. Course correct as needed.
Business advocacy can help ensure the just transition is widely owned and accepted across society.
Advocacy is essential in bringing about science-based climate and just transition policy that unlocks investment and delivers action at scale.
Corporate climate leaders can use their voices, activities, and associations to support strong policy ambition and engage responsibly with policymakers in line with We Mean Business Coalition’s Responsible Policy Engagement Framework. In turn, better designed policies can facilitate the setting and implementation of business just transition plans.
Just transition advocacy starts within your own company by ensuring that your commitment to a just transition is upheld internally, including by executive leadership, and that policy engagement is aligned with this commitment.
Share your commitment to a just transition: Publish your commitment. Share your vision for how your company will manage its transition in a way that is just and sustainable and share the actions you are taking to execute on that vision.
Review your processes for advocacy and lobbying: Establish governance of and review processes on climate lobbying to ensure that your company engages responsibly with policymakers to create a pro-climate policy environment that is also aligned with the objectives of a just transition.
Advocate for a just and inclusive transition and engage responsibly in policy discussions.
Advocate for public policy and enabling frameworks for a just transition: Publicly advocate for the strengthening of institutional and regulatory frameworks that promote inclusion and protection of the most affected stakeholders, contributing to an ambition loop that is good for business, employees, and communities.
This includes meaningful inclusion of a just transition in countries’ Nationally Determined Contributions (NDCs) and long-term strategies (LTSs), the creation of national–level institutions and tools to formalize multistakeholder engagement and dialogue and drive implementation plans, and mobilization of finance in support of just transition efforts.
Policies and regulations that can contribute to achieving a just transition may address:
Another key policy pillar relates to the accessibility and affordability of energy.
Join forces with others to advocate for a just transition: Mobilize your networks and coordinate with peers and suppliers to call for change and demonstrate growing corporate action. Advocate through employer and business membership organizations (EBMOs), also known as business or trade associations, and/or geographical coalitions with which you are involved to create an enabling environment for a just transition. Make use of the collective reach of organizations such as We Mean Business Coalition and its partners to advocate for just transition supportive policies at national and international level.
Clearly and consistently disclose plans, track progress against them, and highlight risks and opportunities.
This builds trust among stakeholders, directs capital, and delivers stronger business performance, while informing strategy. It shows climate resilience and transition readiness.
Investors and other stakeholders increasingly expect companies to disclose the actions they take to achieve a just transition in climate transition action plans. This includes explaining how a company’s transition plan contributes to the economic development of regions where the company is operating and other development issues such as inequality, gender and energy access.
Companies may choose to develop and publish a dedicated ‘just transition plan’ to ensure greater transparency, accountability and to facilitate peer learning.
Disclose your approach to the just transition, including goals and indicators: Disclose your company’s just transition goals externally with time-bound and measurable indicators and actions. Show how your company has engaged in social dialogue and consulted other stakeholders as part of the process. This could be disclosed as part of your company’s external climate disclosure or climate transition action plan.
As part of broader net zero reporting, companies are increasingly expected to set just transition targets, monitor and publicly disclose progress, leveraging existing frameworks.
Report your progress: Communicate your company’s progress in reaching its goals and KPIs and share results and learnings with stakeholders. Leverage existing frameworks to monitor and measure progress, such as the Global Reporting Initiative (GRI), the International Sustainability Standards Board (ISSB), and the EU Corporate Sustainability Reporting Directive (CSRD). Climate Action 100+ and the World Benchmarking Alliance also provide indicators for assessing performance on the just transition.
Transparency around a company’s direct and indirect advocacy and lobbying on the just transition is important for accountability. It also builds awareness of the positive role business can play in ensuring a just transition.
Disclose your advocacy and address any misalignment with the just transition: Publicly disclose membership of, support for, and involvement in associations, alliances, and coalitions engaged in climate change-related, human rights-related, or just transition-related lobbying, across all geographies. Acknowledge and disclose any existing advocacy that is misaligned with the objectives of a just transition or the climate transition more broadly. Determine and report on actions and plans to address and eliminate misalignments.
Disclose how the C-Suite and board of directors are accountable for your company’s just transition performance.
Disclose board engagement and oversight of just transition issues: Disclose the details of the board’s oversight of just transition-related issues. Report the governance mechanisms that are in place to ensure delivery of the strategy and plan. Ensure that just transition ambition and action are frequent agenda items at board meetings.
Ensure transparency on just transition governance: Report your governance structure for oversight and management of the just transition to shareholders and disclose the structure, progress, and KPIs in your annual reports for ease of access.
Be transparent about incentives for leadership: Be transparent about any incentives provided to executives for delivering on the just transition plan. Communicate how incentives are aligned with sustainability and climate action.
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