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What is "Just Transition"?

Just Transitions: India’s Path Forward

This podcast discusses the importance of a just transition in the context of climate change policies and investments and explores the impact of Covid-19 on just transitions.


As the energy transition in India accelerates, how do decisionmakers ensure that the transition is a just and equitable transition? Neha Sharma, Ajay Mathur, Srestha Banerjee, and Mike Ward look at the underlying drivers of India’s energy transitions, and key considerations for creating a just transition, including the need for fairness and equity, geographic disparities, lack of social mobility, labor policy, and energy access.

From the grand to the granular: translating just transition ambitions into investor action

The report describes the current state of the just transition discourse amongst businesses and highlights, with the help of case studies, a just transition “Expectations framework” that can be used by businesses and investors to help with investment assessments and due diligence, shareholder engagement, as well as capital allocation decisions.


The report describes the current state of the just transition discourse amongst businesses and proposes a path forward for businesses and investors to integrate just transition considerations into business decisions. The authors identify the just transition as a critical enabling factor in reaching net zero, noting how governments are increasingly recognizing that climate policies that do not take into account the effects on employment, communities, and consumers run the risk of failure. According to the authors, as the strategic case for just transitions has deepened, leading companies in the energy system have begun to formalize their responses as part of wider climate change strategies., Investors can also play a significant role by making sure that the social dimension is fully integrated into their assessment, stewardship, capital allocation, and policy activities.

The report presents a seven-point framework that combines the governance dimension for businesses (in terms of strategy, policy dialogue, and transparency) with a stakeholder component (including workers, communities, supply chains, and consumers). The intention is for this framework to be used in investment assessments and due diligence, shareholder engagement and stewardship, as well as the capital allocation decisions for portfolio companies. The framework is applied to analyze the work accomplished to date by five European international power utility firms.

The report identifies key lessons, including that businesses acknowledge some of the core foundations of just transitions, though the strategic approach is still emerging, with and that transparency and disclosure on just transitions is still lagging. It also points out how it is likely that investors will increasingly expect an active interest from companies to promote just transitions through public policy advocacy. Furthermore, supply chain realities loom large, in terms of generating quality green jobs for local people and also making sure that sustainability and human rights due diligence are intensified in international sourcing from developing countries. The authors highlight the need for community engagement to move from traditional corporate social responsibility activities to a more transformational model that is built upon co-creation. The report concludes with some critical next steps needed, including: promoting convergence around common approaches; modeling to help identify priority areas for investors; understanding better the role of participation and investor dialogues in just transition plans; along with clarifying the investor role in just transitions in emerging and developing economies.

Climate change and the just transition: A guide for investor action

This report applies a just transition lens to investor approaches, using illustrative examples to propose a framework that helps investors to place just transition principles at the center of their climate strategies.


This report contends that investing in a just transition is set to be the best way to manage the strategic risks and opportunities flowing from the shift to a prosperous, low-carbon, resilient, and inclusive global economy. It highlights the influential role played by investors as the fiduciaries of assets and allocators of capital. The report also suggests how strategies for tackling the growing threat of climate change need to incorporate the full range of environmental, social, and governance (ESG) dimensions of responsible investment. This guide draws from an international review of investor approaches and dialogues with investors to provide a framework that can be applied both by individual institutions and through collaborative initiatives to help investors place just transition principles at the center of their climate strategies.

The article, using several examples of investor actions from around the world, highlights some strategic motivations for investors to pursue this work, including: broadening the understanding of systemic risks from climate change; updating the fiduciary responsibility to capture interrelated environmental and social drivers of long-term performance; recognizing the material drivers of long-term value; and identifying new growth opportunities in areas that combine climate and social goals. Based on these motivations, the article suggests five core areas of action for investors, including investment strategy, corporate engagement, capital allocation, and policy advocacy. The article also provides initial questions for investor engagements with companies on the just transition and highlights the need to build in a process to learn from the emerging experience and the lessons of practice, in terms of corporate engagement, capital allocation, and policy advocacy.

Towards a Just Transition Finance Roadmap for India: Laying the foundations for practical action

The report identifies priority actions for the financial sector in India to address social risks arising from the economic transition, with the help of a just transition framework that assesses the exposure by sector and region.


This report, a product of the India Just Transition Finance Roadmap (JTFR) project, identifies some priority actions that financial institutions can take to support climate action that also delivers positive results in terms of livelihoods and sustainable development. It involves a review of existing practices, an assessment of exposure by sector and region, and the identification of some priority actions for the finance sector. The authors describe the just transition agenda as the “connective tissue” that binds climate goals with social outcomes.

The authors highlight how India simultaneously confronts the challenges of multiple economic transitions—urbanization, digitalization, and the shift to zero carbon. They identify the distributional impacts on Indian states in sectors that are expected to be the most impacted, including: coal mining, electricity generation, agriculture, manufacturing and industry, along with transportation. Using the four dimensions of social risk arising from the net zero transition—namely livelihoods, energy access, public finance, and human development, they find that Madhya Pradesh, Jharkhand, Chattisgarh, Uttar Pradesh, Bihar, Odisha, Telangana, and Rajasthan will be the most affected by the zero-carbon transition.

The authors suggest that the framework shows a possible mapping of risks to investments, highlighting the role that financial sector players, regulators, and policymakers need to play in ensuring that a just transition is achieved. Furthermore, they highlight how the framework can be used to provide guidance for investors to understand company operations in vulnerable regions, and whether there are any investment strategies capable of mitigating the risks in these regions. It can also provide guidance for investors seeking to align capital allocations with the just transition framework. From their conversations with investors, the authors identify how the just transition is still at an early stage of development in India and needs definition and how it needs to be placed in a core sustainable developmental context. Furthermore, the conversations also reveal that policy action is a crucial catalyst for a just transition and that shareholder engagement on just transitions is increasing.

A Just Green Recovery from COVID-19

This paper highlights how the Covid-19 recovery window offers a rare opportunity for accelerating the green transition and examines recovery measures through the lens of a just transition.


This paper highlights how the Covid-19 recovery window offers a rare opportunity for transforming economies and accelerating the green transition. There is renewed openness to large-scale public investments, as governments seek to restore their economic health, boost long-term growth potential, and accelerate decarbonization. But the inequality, exposed by the Covid-19 crisis, also demonstrates the need for policies that can advance equity and justice.

The paper examines green recovery measures through the lens of a just transition. The authors use three key dimensions of a just transition—distributional impacts, social inclusion, and transformative intent—to assess green recovery interventions around the world. They highlight promising examples of just and green recovery measures in various countries and suggest policy insights, with principles and best practices for future action.

Toolkit for assessing effective Territorial Just Transition Plans

This paper identifies a set of principles and proposes a tool for assessing whether European Union (EU) member states’ Territorial Just Transition Plans (TJTPs) that are required for them to access the EU Just Transition Fund would be effective for delivering a just transition.


This paper identifies a set of principles and includes an associated toolkit to assess whether the Territorial Just Transition Plans (TJTPs), developed by member countries of the EU in order to access the EU Just Transition Fund, can enable the delivery of a truly just transition to climate neutrality. Targeted at policymakers, municipalities, civil society, and other partners involved in developing plans, it aims to provide guidance on what a good plan looks like and enable an evaluation of the quality of the plans developed.

The methodology of the tool is based on a series of indicators that allow one to review the performance of the plans against 10 principles. The application of the methodology, which is also available as a webtool, results in a “traffic-light” rating on the plans. WWF intended for the toolkit to be used by the European Commission, national and local policymakers, and any other stakeholders engaged in the development of the plans. WWF has also indicated that published reports are verified and added to their website’s resource page.

Can government transfers make energy subsidy reform socially acceptable? A case study on Ecuador

The report looks at the impact of energy subsidies in Ecuador and its distributional effects as well as explores the scenarios of how the subsidies could be removed and replaced to confer benefits to vulnerable households equitably.


The report identifies the impact of energy subsidies on public finance in Ecuador and looks at the distributional impacts of subsidies. To inform policy design, the authors use the household survey data from Ecuador, in combination with augmented input-output data, to assess the distributional impacts of energy subsidy reform. Energy subsidies account for about seven percent of Ecuador’s yearly public spending or two-thirds of the fiscal deficit. The study finds that it costs USD20 to transfer USD1 to the bottom income quintile through gasoline subsidies; USD10 through electricity; USD9 through diesel subsidies; and USD5 through liquefied petroleum gas (LPG) subsidies. Relative to household income, subsidy removal without compensation would be regressive for diesel and LPG, progressive for gasoline, and approximately neutral for electricity.

While removing these subsidies would yield clear economic and climate benefits, the expected adverse effects on vulnerable households are likely to make such reforms politically difficult. The authors analyze how a fraction of financial resources, freed up by the subsidy reform, could be used to mitigate the income losses of poor households by means of in-kind and in-cash revenue recycling schemes. The results indicate that removing all energy subsidies and increasing the existing social protection program, Bono de Desarrollo Humano, by nearly USD50 per month would confer net benefits of almost 10 percent of their current income to the poorest quintile and also free up significant amounts in the public budget.

The authors also conduct expert interviews to evaluate the political and institutional challenges related to the energy subsidy reform. They identify two combinations of reform options and recycling schemes that would benefit the poorest 40 percent of households, namely eliminating subsidies on gasoline, while increasing the amount transferred to vulnerable households through Bono de Desarrollo Humano; and replacing the universal LPG subsidies with targeted LPG vouchers. The authors suggest that countries in Latin America may benefit from increasing energy prices to fund development programs, reduce public deficits, and incentivize a transition to a low-carbon economy. The cash transfer programs of the region could be an instrument to reduce the impact of energy price hikes on poor consumers, thereby making price reforms more palatable.

Cash transfers for pro-poor carbon taxes in Latin America and the Caribbean

The article looks at how cash transfers could be used as an instrument to mitigate the negative consequences of carbon taxes on poverty.


The study highlights how carbon taxes, while a potentially useful tool in reducing emissions, increase the cost for consumers directly, and indirectly, by raising the prices of goods and services. It further highlights how the effects are felt more by poorer households.

Imposing a carbon tax, consistent with the Paris Agreement goals, could generate more than USD100 billion in revenue per year in 16 countries in Latin America and the Caribbean region—enough to close the water, sanitation, or electricity access gap. However, on average, the study finds that food prices tend to make carbon taxes regressive. The indirect impacts of carbon taxes on food, public transportation, and electricity would cost households more than the direct impacts on fossil fuels. Nonetheless, the authors cite evidence that adequately compensating negatively-affected households with complimentary policies can enable the reforms to succeed.

The study explores four potential methods using models to study options ranging from the redistribution of carbon revenues to cash transfers, including carbon rebates and different iterations of cash transfer programs. The authors find that in the region studied, 30 percent of the carbon revenues could suffice to compensate poor and vulnerable households on average, leaving 70 percent to fund other priorities. According to the study, international experience, beyond normative views, suggests that any government project to implement carbon taxes without a plan to compensate affected households, at least partially, is unsustainable.