6 pairs of hands hold seedlings of plants in a circle above a mound of mulch

The concept of a just transition has started making its way onto the agendas of financial institutions. Despite being relatively new, it also represents a fastgrowing phenomenon in the financial sector. A just transition aims to address the adverse socio-economic effects a low-carbon transition might cause, thus preventing - or at least mitigating - any social harm. It stems from the realisation that a net zero future would not be possible without appropriate consideration of the social injustices that it might bring. However, it is less clear what a just transition entails in terms of its components and aims, and why financial institutions should care about it.

Written by Ivana Popovic, Alexandre C. Köberle and Michael Wilkins, the purpose of this briefing paper is twofold. First, it aims to provide an overview of what a just transition means in general, and for the financial sector, specifically. Second, it provides an overview of why a just transition is important for financial institutions, as well as the frameworks available for integrating a just transition into their plans, policies, and activities.

7 September, 2023