Sat, November 12, 2022
I’m on my way to the B20 meeting in Bali, the Group of 20’s forum for dialogue on business, and one thing is on the agenda: The Paris Goals and the role companies must play in helping the world go global remain warming to well below 2 degrees Celsius above pre-industrial levels.
We’ve made significant progress over the past decade, but the world is still on track for 2.7 degrees Celsius warming by 2100. It’s clear that countries are committed to decarbonizing their economies in the coming years or the The effects of climate change that are already damaging livelihoods will escalate.
But it is also clear that this transition must not come at the expense of the people who are vulnerable to the huge economic changes that this transition will bring. At the same time, we cannot sit on our hands and do nothing, because the people most at risk of being left behind in a poorly planned transition are also those whose livelihoods are most at risk from climate change.
For example, the Deloitte Economics Institute’s Transition Vulnerability Index shows that 500 million jobs in just three countries (India, China and Kenya) are vulnerable to the impacts of climate change or a poorly executed transformation. Because many people in these economies work in emission-intensive and climate-dependent industries such as agriculture.
However, if the transition is just and supports vulnerable communities throughout the process, jobs will be created. Deloitte predicts that a fair, business-backed transition to net zero in Asia-Pacific will create 134 million more jobs than would otherwise be the case.
The world’s transition to a decarbonized economy must be a just transition that ensures no one is left behind. But what that looks like varies from country to country and from local economy to local economy. Here, companies have a unique ability (and responsibility) to ensure they have the right framework in place to support a just transition in the areas in which they operate.
There are four main areas that organizations designing a just transition framework need to address. The first relates to citizens and the community – companies should never derive benefit from the communities in which they operate without giving back.
Businesses should ensure they are a lifeline for local communities. This means sourcing services from local businesses, creating and maintaining new local infrastructure, forging genuine partnerships with Indigenous communities, and proactively working with the community at large to reduce inequalities.
Related to this is the second area, local economic diversification and growth. As the economic transition takes place, companies should do their best to repurpose local assets by upgrading and reusing them for new industries, rather than abandoning them.
The third domain is the environment. Businesses that benefit from nature need to give back – for example, land used for mining operations needs to be rehabilitated or repurposed, care needs to be taken to improve biodiversity, and operations need to rapidly reduce reliance on fossil fuels and emissions-intensive processes. to increase climate resilience.
The fourth and final area is employment. This includes the obvious tasks of providing meaningful employment opportunities that contribute to wage growth, as well as creating employment opportunities for disadvantaged groups. But it’s also about working with government to educate local people so they can benefit from the transition to a low-carbon global economy.
By creating and reallocating skills where they are needed in a coordinated transition, the workforce will be larger, more highly skilled, and more productive over the long term. Vulnerable workers will be central to this outcome, as their existing skills will be used to drive this change, rather than a vehicle to resist it.
Some countries are already developing national frameworks to reskill their populations. The Philippines, one of the Asia-Pacific countries most affected by the impacts of climate change, has enacted a development plan that takes a long-term approach to creating green jobs and created a legal framework aimed at making the transition and sustain a green economy and incentivize green job creation.
The success of global efforts to meet the challenge of the Paris goals will be measured in part by their ability to protect the most vulnerable and ensure that existing inequalities and social justice problems are not exacerbated. The contribution of the business community is crucial to ensure that this just transition takes place.
The author is a partner in Deloitte Australia’s Climate and Sustainability Practice. She recently presented at the B20 Energy, Sustainability and Climate Change Taskforce in Indonesia.