Week of 1 November 2021
Clear building blocks for companies delivering a just energy transition from the Council for Inclusive Capitalism
Our key takeaway: The just energy transition has just become very concrete. There are twenty clear building blocks for energy companies to build on to enable a just transition to take place – companies have done it before, and the Council for Inclusive Capitalism highlights what this looks like in the areas of universal net-zero energy, workforce evolution, community resilience, and collaboration and transparency to inspire others to follow
The Council for Inclusive Capitalism has released its ‘The Just Energy Transition: A Framework for Company Action’ which seeks to “develop actionable guidance for companies to deliver an energy transition that advances social equity”:
- Acting intentionally and collaboratively: the framework was developed by the Council for Inclusive Capitalism with seven international energy and energy-intensive companies (ACEN, Anglo America, bp, Eni, Reliance, Repsol, and SSE) and six academic, investor, civil, and social representatives (CalPERS, Grantham Research Institute, Inclusive Capital Partners, International Trade Union Confederation, State Street, and the UN Special Envoy for Climate Action and Finance). It was supported by a team from BCG. The report notes that “[f]or the global energy transition to succeed, governments, investors, businesses, and civil society must act intentionally and collaboratively so that the transition advances environmental, social, and economic justice. This requires ensuring that the benefits of the transition are broadly shared across society and risks are minimized.” The authors note that “[w]e have a tremendous opportunity to reset and shape the future before us. If we succeed, we will build a world in which environmental, social, and economic justice are mutually reinforcing. If we fail, we risk leaving the most vulnerable and marginalized people behind and jeopardizing the energy transition itself.”
- Four core pillars: The framework is made up of four core pillars: “(1) supporting universal access to energy and a net-zero emissions world, (2) evolving the energy workforce to support a low and zero carbon energy future, (3) building community resilience, and (4) fostering collaboration and transparency throughout the process.” Each pillar in turn contains five “building blocks”, i.e., areas of action that will drive progress. Some of the building blocks represent core best practice (core), while others represent just energy specific practice (JE).
- 20 building blocks for a just transition: Universal net-zero energy is comprised of: pursue an ambitious timeline to carbon neutrality targets (core); work towards universal energy access (core); advocate policies and investments to support a just transition (JE); strive for consumer fairness (JE); and develop a responsible strategy for converting, retiring or sale of assets (JE). Workforce evolution is comprised of: adhere to core labor and safety standards (core); promote diversity, economic inclusion, and equal access to opportunities (core); create decent jobs through low-emissions infrastructure (JE); commit to retain, retrain, and redeploy workers (JE); and design innovative social protection measures to combat adverse impacts of low-carbon policy (JE). Community resilience is comprised of (1) preserve biodiversity and regenerate infrastructure (core); support local development initiatives for communities dependent on assets (core); engage and support suppliers in their just transition path (JE); nurture competitive, local supply chains (JE); and work with educational institutions to bridge anticipated skill gaps (JE). Collaboration and transparency is comprised of: ensure social dialogue with workers (core), engage stakeholders in decision making (core), develop a time-bound just transition plan and disclose progress against it (JE), partner across sectors to scale new ventures with sustainable employment opportunities (JE), and share knowledge and best practices with industry peers and other organizations (JE). The framework provides examples of how companies have sought to meet these building blocks, and the building blocks are mapped to the World Benchmarking Alliance’s Just Transition methodology and the forthcoming Climate Action 100+ just transition indicator.
For more, see Council for Inclusive Capitalism, The Just Energy Transition: A Framework for Company Action (November 2021)