In recent years, discussions about a just transition have focused primarily on the energy sector as the world increasingly shifts to a net zero and climate-resilient economy. Now, a groundbreaking new report by the Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy at the London School of Economics—funded by the Candriam Institute for Sustainable Development—for the first time, examines the need for a just transition at the interlinks of climate and biodiversity.
With agriculture providing work for around one billion-plus people globally and accounting for over 60% of employment in low-income countries, according to 2018 statistics from the International Labor Organization, moving to a low carbon scenario will bring considerable changes to this sector and those working in it—changes which need to be managed responsibly.
The people dependent on agriculture are among the most vulnerable to the effects of climate change and nature loss, including drought, heat and heatwaves, flooding, water scarcity, pollination issues and soil quality deterioration, which pose far-reaching risks to rural livelihoods and food security. This is particularly true for low- and middle-income countries as their economies tend to be more dependent on agriculture, and climate change impacts are often already more severe there.
Poorer communities reliant on environmental resources are particularly affected. Therefore, if agriculture can be transformed to withstand the challenges and contribute to a nature-positive economy, there is potential for the sector to alleviate poverty but for that to happen it must also address job security, social protection and pay.
The report defines the ‘just nature transition’ as one delivering decent work, social inclusion and the eradication of poverty in the shift to a net zero and climate-resilient economy that simultaneously delivers biodiversity goals. This means realizing a shared set of just transition principles: first, to integrate human rights and labor standards across climate and biodiversity action; second, to anticipate, analyze and address the social risks and opportunities of the nature transition for workers, suppliers, communities and consumers; and third, to ensure meaningful social dialogue exists for workers along with wider engagement with other affected stakeholders, which will often involve empowering groups excluded from decision-making, whether by income, gender or race. The nature transition centers on achieving net zero and climate-resilience in agriculture, forestry and land-use, as well as strengthening the conservation of land- and ocean-based biodiversity.
“We need to place people at the heart of building a nature positive economy. If we fail to do this, then not only do we risk not achieving our climate and biodiversity goals, but we also could throw away a major opportunity for creating more and better jobs and livelihoods in nature-dependent sectors.,” says Sabrina Muller, a Sustainable Finance Policy Analyst at the Grantham Research Institute and the report’s co-author.
Looking at the just transition and the natural world, the report examines four main priority areas:
Delivering sustainable agriculture and food systems: The transition in this sector will be crucial for decreasing global greenhouse gas emissions and reversing biodiversity loss but will need to be shaped by social factors including the significant number of people involved in these industries across the world, a baseline of often poor social conditions, and the need for changes in food consumption to be inclusive.
Ending deforestation; The conversion of forest lands is often connected to human rights violations, including land-grabbing and violence – affecting Indigenous Peoples in particular – as well as accelerating the speed of climate change and biodiversity collapse.
Scaling up nature-based solutions; Nature-based solutions such as reforestation can play a key role in reaching net zero and promote human wellbeing, but must be co-developed with local communities and Indigenous Peoples.
Restoring ocean ecosystems. Oceans are home to a wealth of biodiversity but are under increasing threat from human activity – while jobs in fishing and aquaculture are often dangerous and poorly paid.
We know that the financial sector has a critical role to play in helping nations achieve their sustainability goals. Financial institutions such as commercial banks and institutional investors have been increasing their efforts to support a just transition in the energy system. The report outlines that this focus needs to be extended to the nature dimension through strategic commitment, corporate engagement, capital allocation and policy dialogue to reform the system conditions.
“To make the just nature transition take hold, we need to strengthen enforcement of human rights and labour standards, make land tenure more inclusive, advance the rights of Indigenous Peoples, empower women and bring meaningful social dialogue and stakeholder engagement. The financial sector has to be a powerful champion for this,” explained Nick Robins, Professor in Practice for Sustainable Finance at the Grantham Research Institute, who co-authored the report.
The report goes on to note that in each of the four priority areas for the just nature transition, there are already examples of relevant initial practices from financial institutions, from investor statements calling on governments to set emissions reduction targets for agriculture to green loans for sustainable salmon fishing. However, even where financial institutions are starting to address the net zero transition beyond the energy sector, the integration of the social dimension lags behind. Explicit reference to the need for a just transition remains rare.
How can finance make a positive impact in the just nature transition?
The report outlines four levers that the finance sector can employ:
1. Strategy and leadership: Financial institutions should embed the just transition into their strategies and plans to achieve their climate and biodiversity goals – and take leadership in signaling this commitment internally and externally.
2. Corporate engagement: Financial institutions should integrate the just transition into their equity and debt engagement with business, setting expectations, requiring disclosure and pressing for performance in line with international standards.
3. Capital allocation: Financial institutions should actively seek to finance those companies committed to positive social impact for workers, suppliers, communities and consumers in the delivery of climate and biodiversity goals.
4. Policy dialogue and public sector engagement: Financial institutions should advocate that governments introduce effective policies to support the just transition, and engage on public finance priorities, such as sovereign bonds and blended finance, in order to achieve impact. For all of these levers, it is important that financial institutions include the just transition in the way they measure the performance and impact of their climate and environmental activities, and report these to their clients and stakeholders.
Involving local communities will also be key to making the just transition for nature a reality, the report notes and should be part of ongoing dialogue, analysis and action by governments and international organizations, businesses and trade unions, financial institutions and civil society, thereby achieving the aim of delivering a transition to sustainability in a way that benefits workers, communities and consumers.