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June 12, 2024
Authors
Key Points
- The need for an energy transition that is just, fair, inclusive, and benefits both people and the planet is gaining global recognition and is increasingly on the agenda of multilateral organizations and governments with growing expectations for business.
- Companies are facing multiple challenges to advancing the just transition within their operations that must be overcome to ensure that people are prioritized throughout the climate transition process.
- In our work with companies, BSR has identified a few actions that support advancing the just transition, these include securing an executive champion, integrating just transition into existing strategies, establishing formal and information governance mechanisms and leverage successful case studies.
Sustainability teams face numerous internal hurdles when seeking to gain traction on advancing a just transition. Obstacles include breaking down internal silos, overcoming opposition and lack of knowledge, combatting resistance to incorporating just transition principles into policies and practices, and ensuring sufficient capacity and resources for implementation.
The challenge to ensure a just, fair, and inclusive transition is intertwined with various agendas in environmental and social sustainability, including (but not limited to) reducing greenhouse gas emissions, adapting to climate change, protecting biodiversity, ensuring respect for human rights, and reducing inequality. Advancing a just transition requires bridging these efforts to cohesively prioritize people throughout the climate transition process.
In our work with companies, BSR has observed that in many large, multinational companies, net-zero strategies are driven by teams of dedicated climate experts, sustainability efforts are spearheaded by sustainability program managers, and social risks and impacts are managed by social performance and human rights practitioners, with little engagement across silos. The fundamental challenge lies in aligning these distinct teams to collaborate effectively and work towards the common goal of achieving a just transition through a comprehensive, people-centric approach that harmonizes climate action, environmental protection, human rights considerations, and social equity measures. By fostering cross-functional collaboration and aligning objectives, companies can more easily address the multifaceted challenges posed by the energy transition.
Practitioners often struggle to understand how to initiate just transition efforts, break down internal silos, get the right people engaged, and gain the internal buy-in needed to advance the agenda. Additionally, given recent regulatory changes, companies are focusing on the burdensome effort required to comply with mandatory compliance measures, which is leaving little bandwidth for other priorities.
Working with companies to advance the just transition, we have seen that there is no one-size-fits-all approach to advancing the principles of a just transition within a business, as each company faces unique challenges and must tailor its strategy accordingly. We have, however, identified a few company actions that are successfully moving the agenda forward that may serve as inspiration or sources of learning for other practitioners working to advance just transition within their companies.
Lessons Learned on How to Advance the Just Transition Inside a Company
Secure an Executive Champion
A strong executive champion who can drive the just transition agenda forward within a company has proven to be a critical success factor. Their support of just transition can complement other topics for which they are champions, such as human rights or climate justice. Companies with senior leaders, such as the CEO or a dedicated sustainability executive, that are champions of just transition are well-positioned to overcome internal resistance, resolve deadlocks, and create and maintain momentum for their just transition initiatives. Conversely, organizations that have lost executive-level champions or have yet to secure dedicated sponsorship risk stalling progress and facing challenges in gaining traction for their just transition efforts. This highlights the importance of cultivating leadership support and ensuring that the just transition imperative is firmly embedded within the organization's strategic priorities.
Integrate Just Transition into Existing Strategies and Frameworks
Many corporate climate transition plans fail to make a direct connection between human rights and the energy transition. Given this, some companies are exploring ways to incorporate just transition principles into their existing climate transition, net zero, energy transition, or broader sustainability strategies and frameworks.
This integrated approach allows for just transition considerations to be woven into the fabric of the organization's overall sustainability efforts, rather than existing as a separate, siloed initiative. Companies are taking varying approaches, from developing standalone just transition strategies or position statements to integrating the principles across multiple policies and strategies. While a dedicated just transition strategy or position can provide a clear and focused commitment, integration into other strategies and frameworks has allowed some companies to align their just transition ambitions with the company’s existing efforts. A clear benefit of having just transition interwoven into other strategies is integrated communication with stakeholders (whether mandatory or voluntary).
Once these necessary elements are in place, practitioners will be better positioned to engage in targeted communication and training to align diverse internal stakeholders and promote a more holistic understanding of how the company can support a just transition, both as a process and an outcome. As a result, many practitioners have made it their priority to target capacity building and awareness towards business lines and teams, who are on the front lines of implementing just transition efforts.
Establish Formal and Informal Governance Mechanisms
Embedding just transition into formal decision-making structures, such as cross-functional steering committees and working groups, can be an effective approach for driving the just transition agenda forward. These governance mechanisms bring together representatives from various functions, including sustainability, legal, procurement, human resources, and communications, fostering cross-functional alignment on just transition strategies and initiatives. However, while these formal governance structures bring together various internal functions, they typically lack regular representation from a company’s business lines. That is why, in addition to formal decision-making structures, less formal channels, such as working groups without decision-making authority, can play a useful role in building connections with and across business lines and encouraging broader discussions on just transition principles. These informal networks can help raise awareness, build understanding, gather diverse perspectives, and ensure buy-in, laying the groundwork for more formal governance processes over time.
Leverage Successful Case Studies
Showcasing successful own-company case studies and best practices related to just transition can be a powerful tool for building internal support and momentum. Real-world examples that demonstrate the positive impact of incorporating just transition principles – this includes but is not limited to early and transparent engagement with stakeholders, social dialogue with workers and unions, and responsible site decommissioning – can help illustrate the value and feasibility of these efforts. Companies that have leveraged compelling case studies have found success in securing additional company buy-in and have been able to drive the just transition agenda forward within their organizations. Case studies can be important in both demonstrating the business case but also offering clear insights and direction on what implementation can look like which can inform future company processes and expectations.
Take Action
Advancing a just transition is a challenge but one companies across sectors need to embrace. For resources on advancing a just transition visit the Just Transition Resource Platform and for guidance on planning for a just transition see BSR’s Just Transition Planning Toolkit. For support advancing the just transition within your company contact us.
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