Just Transition

A just transition is a principle that ensures the move to a low-carbon economy is done in a way that is fair, inclusive, and socially responsible. It recognises that climate action can have economic and social consequences, particularly for workers, suppliers, and communities reliant on high-carbon industries.

FAQs

What is a just transition?

A just transition ensures that the shift to a low-carbon economy is fair and inclusive, protecting workers, communities, and stakeholders affected by climate action.

Why is just transition important?

It prevents job losses, economic inequality, and social disruption by ensuring that people impacted by decarbonisation have support, opportunities, and a voice in the transition.

Who does a just transition impact?

It can impact employees, suppliers, local communities, and entire industries—anyone affected by business or policy shifts towards sustainability.

What are examples of implementing a just transition?

Suppose you're an SME fashion brand that has committed to Net Zero by 2050. You source organic cotton from smallholder farmers in South Asia. To reduce emissions, you plan to transition to regenerative agriculture practices. However, this shift requires upfront investment, training, and may temporarily reduce crop yields, potentially impacting farmers' incomes.

You could choose to provide financial support, such as subsidies and advance payments, to farmers during the transition period to offset potential income loss. You could also invest in training on regenerative practises, and commit to multi-year purchasing agreements to give farmers financial security.

How does just transition fit into B Corp standards?

Under B Corp’s new Climate Action standards, larger businesses must assess the social impacts of their decarbonisation plans and take steps to mitigate risks to affected stakeholders.

How can businesses ensure a just transition?

Engage stakeholders early and include them in decision-making. Offer financial and training support for impacted workers and suppliers. Ensure equity by prioritising vulnerable groups in the transition process.

What is a just transition in the context of the B Corp Impact Assessment?

Under the new BIA, larger businesses (250+ employees or $75M+ revenue) must assess and address the social impacts of their emissions reduction actions, ensuring workers, suppliers, and communities are supported through climate-related business changes.

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