A “just transition” is the process of decarbonizing the economy while providing opportunity and support for those the industry has harmed – and it’s starting to draw attention as something that should be part of net-zero transition plans. A recent study highlights ways that companies – in particular those in the oil & gas, electric utilities and auto manufacturing – can plan for a carbon transition in a way that doesn’t sacrifice their internal & external diversity, equity & inclusion efforts.
The “Just Transition Action Report” (which was published by the “World Benchmarking Alliance,” an organization that benchmarks industry performance on the UN Sustainable Development Goals) explains that the social impact of low-carbon strategies is currently being overlooked. The analysis is based on publicly available disclosures for 180 companies across the oil & gas, electric utilities, and automotive manufacturing sectors.
Net-Zero’s Missing Considerations
The findings of the report reveal that:
- The vast majority of high-emitting companies are failing to demonstrate efforts towards a just transition
- People most at risk are being left out of decisions that affect their future
- Companies must commit to reskilling workers or risk a stranded workforce
- Businesses are not using their influence to protect people, manager social impacts, and advocate for a just transition
- A just transition needs to be underpinned by companies respect for human rights
As a DEI practitioner, I know there is a lot to focus on right now. These findings reminded me that environmental justice is an important part of creating a more equitable society. Not only that, but due in part to the lack of representation of people of color in clean energy jobs, and the lack of availability of clean energy in underrepresented communities, it’s particularly easy for companies to overlook “inclusion” as an important aspect of “net zero.”
What You Can Do
While those of us who specialize in DEI may feel that environmental issues are out of our wheelhouse, those working to advance DEI in the sectors covered by this report are well-positioned to bring their learnings to those companies’ carbon transition conversations. Including underrepresented people and communities in the decision-making process is definitely in our wheelhouse – and when it comes to net-zero conversations, that inclusion will be an important part of avoiding corporate reputational & financial harm and inadvertently undoing other DEI efforts. Take a look at these findings and make the case for being involved – or use them to prepare for being asked to weigh in.
For the folks who focus on the “E” and “G” aspects of “ESG,” this report is a reminder that siloing ESG is likely to result in missteps. Invite your DEI colleagues to the table – even on topics that appear on their face to focus on environmental matters. And when it comes to the management and oversight of ESG progress, keep in mind that there’s a kind of “butterfly effect” with these interconnected issues. Be careful that your progress on one area doesn’t put you off track for other goals & efforts.