Easing the Climate Transition for Workers

A group of chief executives, trade groups and investors are teaming up on an initiative to ensure companies transitioning to renewable and net-zero emissions are mindful of how employees are impacted.

Backed by the Council for Inclusive Capitalism, the effort that was announced Friday focuses on strategies companies can use to promote equity in how workers are impacted by climate-related business changes. They include creating jobs through low-emissions infrastructure; committing to retaining and retraining workers; and working with educational institutions to bridge anticipated skills gaps.

The effort, known as the Just Energy Transition, includes the chief executives of energy companies BP PLC and Reliance Industries Ltd. and advisory firm Boston Consulting Group.

“We can’t do the energy transition and either leave communities in the dark or leave communities without employment,” said Lynn Forester de Rothschild, Co-Founder of the Council for Inclusive Capitalism.

Large investors, including State Street Corp. and the California Public Employee Retirement System, are also involved. Anne Simpson, head of governance and sustainability at Calpers, said the way companies structure their clean energy transition is a human capital issue that the pension fund is closely following.

“If we don’t make this a just transition there will be social and political backlash that will render it impossible to reach the net-zero goal,” she said, speaking from Glasgow on Thursday. “We can’t just shut things down; we’ve got to transition…This is recognizing that human capital is at the heart of our responsibility.”

Read the full story in the Sustainable Business newsletter.