The UK utility SSE has published a “Just Transition plan” on the back of engagement by shareholders Friends Provident Foundation and Royal London Asset Management.
In a world first, the firm – which employs 12,000 people and is accredited under fair tax and wage schemes – has pledged to adhere to 20 principles to “help to protect workers and communities as the UK moves towards net zero”.
The principles cover five themes:
1. “Good green jobs”
2. “Consumer fairness”
3. “Building and operating new assets”
4. “Looking after people in high-carbon jobs”, and;
5. “Supporting communities”
The move was hailed as a “big win” by Colin Baines, Investment Engagement Manager at Friends Provident Foundation, which has been co-leading engagement on the Just Transition at UK utilities including SSE.
“We are delighted with the extent of SSE’s strategy, which seeks to mitigate the negative impacts of the transition away from fossil fuels for workers and communities, such as prioritising worker retraining and redeployment, and site redevelopment. But it also embraces the transition’s opportunities, such as the provision of good quality green jobs, supporting domestic supply chains, and sharing economic value with local communities, including devising the option of a simple shared ownership structure for onshore renewables,” he said.
Carlota Garcia-Manas, Senior Responsible Investment Analyst at RLAM, revealed that the asset manager will join the Financing the Just Transition Alliance – a consortium of investors, banks, universities and trade unions focused on financing a just transition in the UK – when it launches tomorrow. She said that, in anticipation of a growing emphasis on the social dimension of the climate transition in the run-up to COP26 next year, “we have created an expectations document, which can be used as a blueprint for other energy utility companies to follow SSE’s lead.”
Meanwhile, UK Prime Minister Boris Johnson announced a 10-point plan for making the country’s economy greener as it prepares to host COP26. Expected to cost £12bn in total, the strategy includes bringing forward the ban on petrol and diesel car sales to 2030 (from 2040) and quadrupling offshore wind capacity by 2030. It reiterates the government’s ambition to make London “the global centre of green finance” and promises to invest more in nuclear, hydrogen, carbon capture and energy efficiency, as well as pumping money into greener air travel and shipping.
Ian Simm, CEO of Impax Asset Management said the announcement was “no rabbit out of the hat”, describing the announcement as “more heavily trailed than The Crown” . “But stand back, and there’s no denying the impressive ambition of elements of this plan and the UK Government should be given due credit for the breadth of its scope.”
He called for “a set of clear and credible sectoral roadmaps” to explain how the plans will be enacted. “From an investor’s perspective, this detail really matters. The 10-point plan may whet appetites, but its stated aim of mobilising more than £30bn of private capital will only be achieved if it is followed up quickly by the publication of detailed analysis of investment requirements and strategies for attracting private investment.”
“Top of investors’ wish list would be market reform needed to facilitate development of a smart power grid; a roll-out plan for financing EV charging infrastructure; while accelerated plans for hydrogen gas blending now can help underpin an attractive investment pipeline for later in the decade.”