Share Action

Protecting the rights of workers, communities, consumers and citizens in the low-carbon transition

Poorer communities are suffering the worst effects of the climate crisis, and have the least responsibility for causing it. We must ensure that we share the benefits of the low-carbon transition equitably, and distribute the burdens on the basis of who is able to pay.

By Rachel Haworth, UK Policy Manager, ShareAction

The threat of the climate crisis is now apparent for all to see – and policymakers the world over are making commitments to mitigate and adapt to its impacts.

But unless we face up to the potential human cost, the low-carbon transition could pose serious risks for workers and communities.

Such a transition needs to be just and fair.

As climate impacts rage, policymakers are awake to the need for action

Public awareness of the climate crisis – and support for climate action – is at an all-time high. We turn on the news and see orange skies over California as wildfires rage, and deadly typhoons devastating the Philippines.

Policymakers across the world have woken up to these unprecedented challenges. In 2019, the UK Government passed legislation to reduce the UK’s emissions of greenhouse gases to net-zero by 2050.

Investors are following suit. The amount of money in environmental, social and governance (ESG)-focused funds more than doubled in 2020.

The low-carbon transition has significant social risks

However, the move to a low-carbon economy will not be smooth, and unless action is taken it will not be fair.

If policymakers fail to make equality and equity a priority in the transition, we could face serious economic and social risks. The north of England is just one example: it could face 28,000 direct job losses from the closure of coal-fired power plants.

The UK Government’s pledge to cut carbon emissions could also leave households at greater risk of fuel poverty as they are unable to pay for greener heating.

In turn, this could threaten public support for climate policies. Poorer communities are suffering the worst effects of the climate crisis, and have the least responsibility for causing it. We must ensure that we share the benefits of the transition equitably, and distribute the burdens on the basis of who is able to pay.

A robust policy framework is needed to ensure private finance protects human rights

Although public finance will be vital in funding the just transition, private investors also wield significant power. If they finance climate action without examining its social impacts, they run the risk of creating more problems than they solve.

Policymakers must “lay the track” for private finance to protect the rights and interests of workers, communities, consumers and citizens in the process of transforming our economy.

We want to see UK and EU policymakers make the just transition a key focus in delivering net-zero

We are calling for the just transition to be a central part of the UK Government’s delivery of its net-zero commitments.

The term ‘just transition’ refers to a fair and inclusive process that prioritises the social needs of workers, communities, consumers and citizens impacted by the transition to a net-zero economy.

We urge the government to include the just transition as an explicit priority within its “levelling up” agenda, balancing national oversight with regional powers.

We want to see it take a more joined-up approach to financial regulation, creating a policy environment that will enable the “place-based” investments needed in the real economy.

We also want to see the just transition become a key priority in the EU’s sustainable finance programme. We encourage the Commission to continue to build on its Just Transition Mechanism and proposals to strengthen stakeholder engagement in corporate strategy and due diligence processes.

The barriers include a lack of human rights due diligence, social dialogue and local climate financing

One key barrier to achieving a just transition is the lack of human rights due diligence (HRDD) undertaken by companies and investors. This means that human rights abuses are still rife in global business practices, including forced labour in solar panel supply chains.

We’ve recommended that the UK and EU mandate human rights due diligence for companies.

It is essential that investors push companies to have meaningful social dialogue with the communities and workers at the forefront of dealing with transition-related challenges.

We’ve recommended that policymakers in the UK and EU issue guidance to support effective social dialogue practices for investors.

Finally, the impact of the low-carbon transition will vary across geographic regions and sectors.

Mobilising financial flows to community-level projects is key to ensuring that local communities and workers benefit from investments during the transition. However, these are not currently reaching the local level.

We’ve recommended that the UK Government creates a national Just Transition Commission, tasked with coordinating regional bodies with devolved powers.

Prioritising social justice in the transition can help address inequalities and retain public support

The move to decarbonise our economy has significant potential to offer exciting opportunities in generating new jobs and reducing inequality.

If we embed social justice at the heart of the low-carbon transition, we can fix existing inequalities and ensure public buy-in for the long process of economic transformation.

Private finance is at the very start of addressing this challenge: it needs policymakers to “lay the track” for a just transition.

Download the briefing >> Laying the Track: The Race to Zero – The role of investors in addressing the just transition

Latest News