A rapid transition with inclusive growth - A view from the CBI Annual Forum 2018

The 2018 Climate Bonds Initiative Annual Forum has seen a high participation, with major stakeholders engaging with issuers and investors. As in the previous editions of the event, a wide range of green finance/climate finance topics has been discussed, but this year social issues have made their appearance in the program, with a roundtable entirely dedicated to Just Transition.

Samantha Smith, Director at the Just Transition Centre of ITUC, opened the floor of the session presenting how the transition towards sustainability and renewable energy is bringing a profound change in societies around the world, enhancing the risk for social inequalities. “Just Transition (...) is about the communities left behind while we are transitioning towards renewable energy and sustainable ways of production”, Smith stated. The path towards sustainability will create more jobs, but other professional figures are already becoming obsolete leaving workers with no means to provide for themselves and their families, and this cannot be ignored.

A negotiation process (social dialogue) between affected workers, their unions, and communities is paramount to ensure that the burden of a change that will benefit everyone will not be placed disproportionately on a few, providing social justice for workers, women, the poor, and oppressed groups. Workers’ pensions and health care benefits should be preserved, and they should receive education and training to move towards new industries.

The role of investors and green bonds issuers is central in this process. When there’s the willingness to move towards sustainability, Just Transition is seen as an opportunity and not as an obstacle. In the State of New York, workers created Climate Jobs NY, a coalition of labour unions in the energy, buildings, and transport sectors united to combat climate change and advocating for a just transition. The alliance contributed to the creation of the Clean Climate Careers, an initiative led by the Government of the State of New York, allocating $1.5 billion for proposals for renewable energy development. The goal is to make New York the new focus of the American green economy, producing 2.2 gigawatts of energy from wind power and creating 40.000 new jobs in the renewables/sustainability sector by 2020.

The Climate Jobs Coalition is an example of the effective synergy that can be created between the public and private sector to achieve a Just Transition. Sagarika Chatterjee, Associate Director of Policy and Research at Principles for Responsible Investments (PRI), stressed how the private sector should look at these successes and adopt a holistic approach to integrate SDGs principles and ensure both sustainability and Just Transition. PRI has been working with this goal providing evidence of the physical impacts of climate change on local communities, and guiding private business towards sustainable and ethical investments.

Investments analysts are starting to include social aspects in their approach, as seen in the CLIMATE ACTION 100+. The initiative is a five years plan led by investors to engage with the world’s largest corporate greenhouse gas emitters to improve governance on climate change and curb emissions. The plan will also explore and promote new ways to incorporate a social perspective in green investments. This is encouraging, but still not the norm and more private business should lead the way towards Just Transition.

The Insurance Group Generali is moving in this direction. Lucia Silva, Head of Sustainability and Social Responsibility, explained how the integration in their work of a social dimension wasn’t immediate. One of the main challenges that the insurance company faced was how to define a carbon-related activity and set criteria to exclude the businesses involved in those activities from their investments. Generali adopted one of the most stringent criteria about “carbon-related activities” in circulation: if 30% of the revenues of a business production are linked to coal, they won’t qualify to work with them. To further promote the shift towards renewables Generali renounced to 2 billion of investments in coal. They made temporary exemptions for those investments made in countries currently too dependent on coal. They keep engaging with these companies, encouraging that the shift to renewables and a plan for transitioning their workers will be a fundamental part of their long-term business plan.

A different perspective was presented by Rathin Roy, Director and Chief Executive Officer at NIPFP. Talking about the challenges that India is facing, Roy highlighted how in emerging economies the concept of a Just Transition would be an impractical luxury. In a country where not working means to starve, it would already be a significant achievement to take people out of indecent work improving their quality of life. “In India, there’s little transition that needs to be made, what is needed is a cultural transformation.”, Roy continued, “promoting internal sustainable growth”. The way to boost this process is through significant investments in the green market. Merging green bonds investments with social goals such as housing, health and education, will create a new culture, leading to sustainability, housing, food security and decent employment for everyone.

Chiara Soletti


Published internally for by and for Climate Bonds Initiative