Only a minority of companies are engaged with a “just” transition, if they are undertaking a low-carbon transition at all.
This is according to the World Benchmarking Alliance (WBA) Just Transition Assessment report, which was launched at the climate talks in Glasgow.
WBA’s assessment covered 180 companies across three sectors. About 100 oil and gas companies, 50 electric utilities and 30 automotive manufacturers were featured in the report. The alliance’s assessments look at the social elements of the companies’ transition to a low-carbon future, based on the companies’ publicly available disclosures.
The companies in the report packed an economic punch, with an estimated collective revenue of more than US$7.5 billion and directly employing more than 11.5 million people.
The WBA warned that urgent attention from these companies and the policymakers involved was needed.
“Without concerted effort to bring people along as part of the decarbonisation transformation, it isn’t just workers and local communities that will suffer and be left behind; the entire transformation is at risk of being undermined by civil unrest among workers and communities whose livelihoods are threatened,” the report stated.
It said a just transition envisions resilient and thriving workers and communities carrying out green and decent jobs, while limiting the global temperature increase to 1.5°C above pre-industrial levels in line with the Paris Agreement.
It warned that the transition to a green economy will look different for each industry, yet the fundamentals of a just transition transcend individual industries.
“At its foundation, a just transition can only be realised through social dialogue. At an industry and enterprise level, this must include meaningful negotiation between, at a minimum, employers and their workers, unions or representatives. This is because the global transition to a well-functioning low-carbon economy can only be socially just if the people at the heart of the current carbon-intensive systems are identified and engaged as agents of change.”
A successful transformation means rapidly phasing out fossil fuels from high-emitting sectors, while creating new industries, new skills and new jobs through investment, the report stated.
How are companies performing so far?
The companies’ performance against the WBA’s just transition indicators is currently weak.
The average score for all companies is a devastatingly low 2.7 out of a possible score of 16. Of the 180 companies assessed, only 5% received more than the mid-level score of 8. The vast majority of companies, 84%, scored 4 points or less, and 32 of those companies score 0 on all just transition fundamentals.
It said the leading generator of renewable electricity in the UK, SSE, achieved the highest score with 14 points. Both Eskom and Sasol performed poorly in the assessment.
Read part one here.