Session co-organized by the Working Group on business and human rights, the Investor Alliance for Human Rights and Principles for Responsible InvestmentInterpretation available in English, French and Spanish(Version française ci-jointe)
(Versión en español adjunta)Brief description of the session:A just transition refers to the transition to a green and zero-carbon economy that is fair and inclusive, creates decent work opportunities, reduces poverty and inequalities and upholds the human rights of workers, including in the informal sector, and affected communities, in particular Indigenous Peoples and populations affected by environmental degradation and energy poverty, through social dialogue and meaningful participation in decision-making including on the use of land and natural resources (See A/78/155). Thus, a just transition includes environmental, social, economic, climate change and human rights aspects. Just transition programmes will require adequate and appropriate financing from the private sector, including contributions from the financial sector (like institutional investors and banks). Some States have started introducing a few financial incentives and regulatory measures for businesses and investors to enable a just transition. However, regulatory gaps remain.
Beyond financing and investing in environmentally sustainable business and projects, financial sector actors have various forms of leverage they can exercise to push businesses and States to support sustainable business practices and a global economy. These include stewardship activities targeting investees or responsibly advocating for the creation of an enabling environment, and government incentives and public-private partnerships that address the environmental and social risks inherent to this transition. These all have strengths and limitations. Further, investors and banks must overcome environmental, social and governance (ESG) silos in approaches to sustainability, as a just transition necessitates understanding how environmental, sustainable development and human rights impacts are inextricably intertwined.
Key objectives of the session:
In a complex landscape, a smart mix of both good guidance and targeted regulation plays a role in maximizing the leverage of financial actors to contribute to a just transition. With a focus on renewable energy, and critical energy transition minerals, the panel will discuss key recommendations around how a smart mix of measures, both on sustainable finance and for the real economy, can be implemented to ensure effective policy and finance sector action towards the just transition.
Key discussion questions:- What leverage can the financial sector and States bring to bear in the transition to a green economy?
- How are those forms of leverage impactful and what are their limitations?
- How can a smart mix of regulatory and voluntary measures and incentives help overcome those limitations and enable a just transition?
Background to the discussion- UN Working Group on business and human rights, Investors, Environmental, Social and Governance Approaches and Human Rights (A/HRC/56/55)
- UN Working Group on business and human rights, Extractive Sector, Just Transition and Human Rights (A/78/155)
- UN Working Group on business and human rights, Taking stock of investor implementation of the Guiding Principles on Business and Human Rights, (A/HRC/47/39/Add.1)
- OHCHR, Key messages on human rights and a just transition
- Investor Alliance for Human Rights, Investor Guidance : https://investorsforhumanrights.org/sites/default/files/attachments/2024-01/FINAL%20ASI%2C%20HCIJ%2C%20IAHR%20Investor%20Guidance%202.pdf
- Investor Alliance for Human Rights, Policy Brief: https://investorsforhumanrights.org/sites/default/files/attachments/2024-01/FINAL%20ASI%2C%20HCIJ%2C%20IAHR%20Policy%20Brief%20%281%29.pdf
