UK government transition plan taskforce exploring Just Transition

Finance sector climate initiatives should include Just Transition as part of frameworks and conditions for membership, upcoming Grantham Research Institute report will say.

Members of the UK government-mandated Transition Plan Taskforce (TPT) are working on a technical briefing paper on incorporating Just Transition considerations into its recommendations, Responsible Investor can reveal. 

Launched this year, the TPT has been tasked with developing a gold standard for transition plans from UK financial institutions and corporates. The Treasury had previously indicated its intention to make publication of such plans mandatory.  

The Taskforce is led by a steering group of private and public sector leaders, co-chaired by Aviva CEO Amanda Blanc and John Glen, who resigned as economic secretary to the Treasury on 6 July. It is supported by a delivery group of senior experts from across industry, academia and civil society. The secretariat for the TPT is provided by the UK Centre for Greening Finance and Investment (CGFI) and E3G. 

In July, the TPT closed its call for evidence on a sector-neutral framework for private sector transition plans. 

Brendan Curran, a policy fellow on sustainable finance at the Grantham Research Institute on Climate Change and the Environment, told RI that the institute – in collaboration with fellow Delivery Group member, the Impact Investing Institute – is writing a technical briefing paper on how a Just Transition can be incorporated into transition plans. 

Bella Landymore, policy director at the Impact Investing Institute, told RI: “A single focus on reducing CO2 emissions to achieve net zero is not sufficient. It is vital that the Just Transition is a key consideration for all actors – namely governments, businesses and financial institutions – in the planning, implementation and assessment of actions taken to achieve net-zero targets. Transition plans are a key mechanism for enabling this.”

According to Curran, the briefing will be similar to one the Grantham Institute is independently working on. Set to be published in September, it will explore how Just Transition should be covered in financial institutions’ transition plans. 

The key difference between the two pieces of work is that the briefing being developed with the Impact Investing Institute is more sector-neutral. 

Curran said the next step will be to share the briefing – once it is completed – with the TPT secretariat. “The idea of a subsequent working group to refine what would be included in any guidance is also being suggested,” he said. 

Landymore added: “The ultimate goal of the note is to demonstrate and persuade of the necessity of Just Transition considerations in transition planning – and in the implementation and assessment of consequent actions.

“What is the impact on the workforce, supply chain and communities of actions taken to reach net-zero targets? How can negative impacts be mitigated, and how can positive opportunities be optimised? Transition plan frameworks and guidance would require and explain how users should incorporate just transition considerations throughout – in first principles, products and services, activities, policies, engagement, measurement and monitoring, skills and governance.

Circling back to the Grantham Institute’s paper on financial institutions’ plans, Curran said the process has involved roundtables with financial sector actors, as well as members of the institute’s Financing the Just Transition Alliance. 

Although the institute is still receiving feedback on the report, RI has seen a current draft detailing 11 potential recommendations for how financial institutions could incorporate Just Transition principles in their net-zero plans.  

Among the suggestions, financial institutions are called on to commit to embedding Just Transition principles as part of the overarching goals, ambitions and foundations of their net-zero transition plans, as well as through the investment process across all asset classes. 

On a larger scale, all net-zero and climate initiatives in the finance sector should include a commitment to support the Just Transition as part of their frameworks and conditions for membership, the draft says.