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Climate Justice and the Just Transition

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Action Speaks Louder wholeheartedly supports a just transition and recognizes that this is a cross-cutting issue to our work holding companies accountable for their climate impacts.

Climate scientists are clear that in order to mitigate catastrophic climate change, we must:

  1. Recognize its main cause: fossil fuels
  2. Invest in the main solution to cutting carbon emissions: renewable energy

However, shifting the entire energy system upon which almost 8 billion people depend will require significant changes to the world’s economy, including the labor market. The green transition, therefore, must be designed and implemented in such a way that those 8 billion people have the opportunity to thrive.

We need to ensure that the problems associated with our fossil fuel-based energy system, such as the exploitation of workers and communities, destruction of nature, wildlife and biodiversity, and unfair distribution of wealth and profits, are not simply repeated or perpetuated under a clean energy system.

This is where climate justice and the just transition come in. In short, this means that no one should be left behind as companies and countries reduce their reliance on fossil fuels.

What is a just transition?

The International Labour Organization (ILO) defines a just transition as:

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. It involves maximizing the social and economic opportunities of climate action while minimizing and carefully managing any challenges — including through effective social dialogue among all groups impacted and respect for fundamental labor principles and rights.

This means that when companies strive to make their practices more environmentally sustainable, for example by transitioning from fossil fuels to renewable energy, or from linear to circular economy business models, people’s rights, land and livelihoods must be carefully considered. 

According to the International Labour Organization (ILO) guidelines for a Just Transition Towards Environmentally Sustainable Economies and Societies For All, workers, women, landholders, indigenous peoples and others must fully participate in decision-making processes as part of this consideration. Organizations such as Business for Social Responsibility (BSR) offer companies clear guidance for implementing just transition principles such as social dialogue and stakeholder engagement into their approach to net zero emissions.

Unfortunately, The World Benchmarking Alliance’s Just Transition Assessment found that despite some examples of corporate efforts towards a just transition, companies are mostly failing to address the environmental and social risks of their climate transition plans.

The UN’s business brief on Just Transition and Renewable Energy concludes that to meet the challenge of the climate crisis while mitigating socioeconomic risks, businesses should set ambitious targets for a just energy transition accompanied by credible transition plans and public disclosure of progress. They must also become vocal advocates for the just transition and call upon governments and other partners to create an enabling environment for companies to advance effective just transition initiatives.

Recognizing vulnerabilities to climate impacts

Climate change has a disproportionate impact on certain regions due to factors such as low-lying land that is vulnerable to sea level rise, or dry climates that are vulnerable to extreme heat and forest fires. Additionally, climate change disproportionately affects people on low incomes who lack the resources to manage and mitigate the impacts of extreme weather events. This is despite the fact that only 10% of the world’s greenhouse gases are emitted by the world’s 74 lowest-income countries.

Large companies often source their products from low-income and climate-vulnerable countries because of the low labor costs and weak social and environmental regulations. However, these companies are now facing the reality that their business model is putting the future of their own supply chains at risk. For example, apparel factories in some of the industry’s biggest hubs such as Dhaka, Guangzhou, and Ho Chi Minh City are at extreme flood risk, while garment and textile workers in Cambodia are already experiencing the impacts of regular floods and extreme temperatures at work.

We don’t want brands to reduce emissions just because it looks good on their latest sustainability report; we want them to reduce emissions because it will reduce the harm already caused to the communities from which they extract value that makes them billions in profits. It is the responsibility of major companies to invest in the green transition instead of blaming the substantial carbon footprints of the products they profit from on the suppliers, whom they squeeze on margins, and ultimately to workers who are paid less than a living wage, leaving them very little resilience to the impacts of the climate crisis.

This is why we need to see investment in climate adaptation and resilience in addition to mitigation – which refers to actions taken to reduce or remove emissions. At a policy level, loss and damage funds are beginning to form in order to address the socioeconomic harms that are already being experienced by vulnerable communities, such as small island states as a result of climate change.

How Action Speaks Louder supports a just transition

At an organizational level, we take responsibility for planning and executing campaigns in alignment with just transition principles. For example, consulting and collaborating with local civil society and grassroots organizations, labor rights groups, and suppliers in the sourcing countries of major company supply chains in order to ensure their perspectives, experiences and demands are represented in our campaigning and advocacy work. 

We specifically push for companies to invest in local and additional wind and solar technology that is produced in line with just transition principles for the energy sector, and we firmly stand against companies which claim emissions reductions by using carbon offsets or forest biomass where these methods harm communities and ecosystems, such as through deforestation.

In our asks to major companies, we ensure that beyond target setting, we need to see evidence of credible climate transition plans that enshrine significant investment to support suppliers to decarbonize as well as responsible purchasing practices that enable more equitable and collaborative brand-supplier relationships to enable long-term investments in decarbonization. 

This is important because the companies we focus on depend on outsourcing to manufacturers, and generally, their biggest emissions hotspot is their supply chain, rather than their owned and operated facilities. This means interventions need to be made at the supplier level in order to reduce a company’s scope 3 greenhouse gas emissions and fossil fuel consumption. 

Action Speaks Louder works to help close the ‘do-say gap’ between the narratives brands push about their support for climate action, versus the actions they are taking to help implement sustainable solutions in their supply chain. Explicitly, we never recommend that companies drop their suppliers or mandate specific requirements in order to continue a business relationship. Instead, we strongly advocate for companies to engage collaboratively with their supply chain and provide fair and accessible models of financial and technical support to enable their suppliers to access resources for decarbonization. 

We know that setting strong energy and emissions targets drives change at the company and sector levels. A just transition requires setting equally ambitious social and environmental targets through the entire value chain, and that progress against these targets is reported publicly so companies can be held accountable.

Overall, the most successful transitions are rooted in social dialogue and stakeholder consultation. Companies must set ambitious targets, publicly communicate them, and work in close partnership with stakeholders across their entire value chain to secure positive results for people and the planet.

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