Just Transition and Fairnesses?

EcoVision
Nov 15
2 min read

A Just Transition refers to ensuring that the shift toward a low‑carbon and sustainable economy is fair, inclusive, and equitable — so that workers, communities, and industries affected by climate action are not left behind.

⚖️ A Just Transition ensures that environmental progress goes hand‑in‑hand with social justice and economic fairness.

Key Principles

Principle	Description
Equity & Inclusion	Support for people and communities most affected by the green transition (e.g., fossil fuel workers).
Decent Work	Creation of new green jobs with good wages, training, and safety.
Community Support	Investment in regions dependent on high‑carbon industries.
Stakeholder Voice	Involving workers, unions, local communities, and governments in planning transitions.
Social Protection	Providing financial and retraining support for displaced workers.

Why It Matters in ESG

In ESG frameworks:

E (Environmental): Reducing emissions and transitioning to clean energy.
S (Social): Ensuring workers and communities benefit from the transition.
G (Governance): Setting fair transition policies, accountability, and transparent reporting.

So, a company cannot be considered fully ESG‑aligned if its carbon reduction, transition processes leads to job losses or social inequality without mitigation plans.

Global examples of “Just Transition”

1. Coal Mine Closures in Europe

Context: Moving away from coal power to meet climate goals.
Just Transition Approach:
- Governments and companies provided retraining programs for miners to move into renewable energy work.
- Economic diversification plans developed for local communities.

2. Energy Company Initiatives

Example: Ørsted (formerly Danish Oil and Natural Gas) shifted from fossil fuels to offshore wind — while retraining thousands of employees and maintaining job security.
ESG relevance: Aligned environmental transformation with worker protection and social responsibility.

3. Auto Industry Transition

Example: General Motors and Ford in the U.S. are transitioning to electric vehicles (EVs).
- Ensuring factory workers are retrained for EV manufacturing.
- Partnering with local governments to maintain employment opportunities.

4. Developing Nation Support

Under global pledges (like the Paris Agreement), wealthier nations fund Just Energy Transition Partnerships (JETPs) — e.g., South Africa, Indonesia, and Vietnam — to help move from coal to renewables while supporting communities.

Quick Summary

Aspect	Description
Definition	A fair and inclusive process ensuring people and communities are not harmed by climate and economic transitions.
Main Goal	Balance environmental ambition with social justice.
ESG Relevance	Sits mainly under S (Social) and G (Governance); aligns environmental goals (E) with fairness.
Example	Worker retraining when moving from fossil fuels to renewable energy jobs.

The “Just Transition” connects and need to consider all three pillars — ensuring the green economy is not only sustainable but also fair and inclusive.

References & Additional Readings