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Event

Just Transitions: Frameworks and Finance

This workshop discussed the elements of just transitions and explored financing mechanisms and the role of investors to respond to financing needs.
Last Updated December 18, 2020
Jun
23
2020
This event has already occurred.

CSIS and the Climate Investment Funds (CIF) held a workshop to discuss just transitions—the idea that, as the world transitions toward sustainable development, workers and communities must both be protected by and benefit from the deep and rapid changes to come. Experts from multilateral development banks, labor and environmental organizations, think tanks, governments, and other institutions outlined key principles and challenges to just transitions.

Offering feedback on our analytical framework on just transitions, they identified gaps in knowledge and key research questions to be addressed through the JTI and the just transitions research community more broadly. The robust discussion focused on how to finance a just transition, including the role of governments, multilateral institutions, and the private sector. 

Participants

Sarah Ladislaw

Senior Vice President; Director and Senior Fellow, Energy Security and Climate Change Program, Center for Strategic and International Studies

Mafalda Duarte

Mafalda Duarate

CEO, Climate Investment Funds

Samantha Smith

Samantha Smith

Just Transitions Centre; International Trade Union Confederation

Aaron Atteridge

Aaron Atteridge

Senior Research Fellow, Stockholm Environment Institute

Nick Robins

Nick Robins

Professor in Practice, Grantham Research Institute on Climate Change and the Environment

Russell Bishop

Russell Bishop

Principal Economist, European Bank for Reconstruction and Development

Therese Niklasson

Therese Niklasson

Global Head of ESG, Ninety One

David Wood

David Wood

Director, Initiative for Responsible Investment

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This event was made possible by support from the Climate Investment Funds.

Related
from the Resource Library

Report/Guidelines, Strategies and Recommendations; Policy Tools or Evaluations
Jun 2020

Seven Principles to Realize a Just Transition to a Low-carbon Economy

This report proposes seven basic policy principles to support just transitions in response to climate change and offers concrete ways to apply these principles in practice.

Geographic Scope
Global
Sectors
General
Detail
Focus Areas
Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment
Employment > Job creation and/or equality, Skills, Social protections
Environment and/or pollution > Nature
Inequality and/or poverty > Gender inequality, Other
Investment > Stranded assets
Social and/or cultural impacts > Non-financial loss, Pride or cultural identity
Keywords
carbon lock-in
small and mid-size enterprises (SMEs)
entrepreneurial discovery process
polluter pays principle
environmental legacies
environmental reclamation
historical responsibility for global emissions
By
Aaron Atteridge, Claudia Strambo
Publishing Organization
Stockholm Environment Institute (SEI)
Academic/research institution or journal
Summary

“Based on a critical review of former transitions, the authors distill seven basic principles for ensuring just transitions: actively encourage decarbonization; avoid creating carbon lock-in and more “losers” in these sectors; support affected regions; support workers, their families, and the wider community affected by closures or downscaling; clean up environmental damage and ensure that related costs are not transferred from the private to the public sector; address existing economic and social inequalities; and ensure an inclusive and transparent planning process.

These principles highlight the importance of supporting affected workers but place equal emphasis on ensuring environmental protection and restoration, diversifying industry and other economic activities, and tackling socioeconomic inequity (including gender inequality) in an active pursuit of decarbonization. The authors offer recommendations on how to implement each of these principles, arguing that the justness of a transition comes from pursuing each of these principles simultaneously and that failure to do so will result in a lack of necessary social and economic support. “

Guidance document/Guidelines, Strategies and Recommendations
Dec 2018

Climate and the Just Transition: A Guide for Investor Action

This guide provides a framework for investors to further the just transition agenda through their climate strategies and core operating practices.

Geographic Scope
Global
Sectors
General
Detail
Focus Areas
Inequality and/or poverty > Other
Investment > Competitiveness, ESG and corporate engagement, Private finance, Stranded assets
Resilience
Keywords
responsible investment
investment strategy
fiduciary duty
By
Nick Robins, Vonda Brunsting, David Wood
Publishing Organization
Grantham Research Institute on Climate Change and the Environment, Initiative for Responsible Investment
Academic/research institution or journal
Summary

This guide was generated as part of the “Investing in a Just Transition Initiative,” a joint program of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE) and the Initiative for Responsible Investment at the Harvard Kennedy School. This initiative seeks to enable institutional investors to support inclusive economies and sustainable development through their action on climate change. This guide explains the motivations for investor action toward just transitions and describes how investors can apply existing approaches to pursue a just transition in their climate strategies and core operating practices.

Investors can make an important contribution to the just transition agenda as fiduciaries, stewards of assets, allocators of capital, and influential voices in public policy. The authors identify five ways in which investors can incorporate just transition principles into their practices, both as individual institutions and collective initiatives. These approaches include investment strategy, corporate engagement, capital allocation, policy advocacy, and shared learning. The authors provide concrete examples of these approaches and recommendations for next steps.

Report/Guidelines, Strategies and Recommendations
Jun 2020

The EBRD Just Transition Initiative: Sharing the Benefits of a Green Economy Transition and Protecting Vulnerable Countries, Regions and People from Falling behind

This paper sets out the aims, rationale, and broad approach to implementation of the European Bank for Reconstruction and Development’s just transition initiative.

Geographic Scope
Europe
Sectors
General
Detail
Focus Areas
Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment
Employment > Job creation and/or equality, Skills, Social protections
Environment and/or pollution > Nature
Inequality and/or poverty > Other
Investment > Competitiveness, Private finance, Stranded assets
Social and/or cultural impacts > Non-financial loss, Pride or cultural identity
Keywords
social inclusion
infrastructure investment
climate policy
private sector
coal assets
strategic and regional planning
coronavirus
environmental reclamation
green economy
just transition diagnostic
environmental legacies
Publishing Organization
European Bank for Reconstruction and Development (EBRD)
Development finance institution
Summary

This paper examines how the European Bank for Reconstruction and Development (EBRD) will support progress in the economies where it invests. The paper outlines the aims, rationale, and broad approach to implementation of the EBRD’s just transition initiative, which aims to help the bank’s regions share the benefits of a green economic transition and to protect vulnerable countries, regions, and people from falling behind. The initiative builds on the EBRD’s experience of fostering transition toward sustainable, well-functioning market economies and focuses on the link between the green economy and economic inclusion. Working with national and regional authorities, EBRD clients, and other partners, the initiative emphasizes policy and commercial financing interventions that support a green transition while also assisting workers (particularly those whose livelihoods are linked to fossil fuels) in accessing new opportunities.

The paper includes an overview of the EBRD’s emerging just transition diagnostic and metrics for screening investments. This approach helps the bank screen certain regions and industries for vulnerabilities, assess the potential for various investments to advance just transition objectives and the bank’s core goals, and develop a set of policies and investment activities. This framework is especially useful in demonstrating how development finance institutions can link individual investments with broader regional plans, including in place-based investment.

Report/Definitions and Concepts
Jun 2020

Just Transition Concepts and Relevance for Climate Action

This report explains the origins and evolution of just transitions, and offers a framework to represent the range of definitions as well as underlying ideologies and approaches.

Geographic Scope
Global
Sectors
General
Detail
Focus Areas
Investment > ESG and corporate engagement, Private finance
Justice
Social and/or cultural impacts > Non-financial loss
Keywords
definitions
conceptual framework
social inclusion
procedural justice
distributional justice
recognition
scope
scale
stakeholder perspectives
financing mechanisms
By
Ben Cahill, Mary Margaret Allen, Sarah Ladislaw
Publishing Organization
Center for Strategic and International Studies, Climate Investment Funds (CIF)
Academic/research institution or journal, Development finance institution
Summary

This report outlines the origins of just transitions in the US labor movement, the later adoption of the concept by the environmental and climate justice movements, and its role in international climate negotiations. The authors note that the term “just transitions” evokes a range of responses, from enthusiasm to confusion to outright skepticism, suggesting the need for a clear definition.

The paper presents a framework to capture the range of definitions and interpretations of just transitions. One key dimension is scope, including both distributional impacts—or who and what is affected in transitions—as well as intention (the ideological preference between reforming or transforming existing political and economic systems through just transitions). The other dimension in the framework is social inclusion, or the range of recognition and procedural justice for various groups. The framework does not seek to identify a single “correct” definitions of just transitions, but rather captures a range of ideologies and approaches to the concept.

A final section of the paper suggests that the next stage of just transitions work will be to advance solutions and to apply lessons learned. The authors list several priorities for future research including concrete tools and strategies, more case studies of developing countries, more effective social engagement, and new financing methods.