Company disclosures and metrics as tools for just transition monitoring: investor, rightsholder and policy perspectives

This report seeks to identify how monitoring and scrutiny can be an effective tool for enhancing just transition finance. Its aim is to identify gaps and use cases for the metrics and monitoring space. The report presents the different needs for just transition metrics of investors and rightsholders – i.e. stakeholder groups impacted by company activities under transition plans in ways that affect their human rights. It explores policy options that can meet both groups’ needs while also remaining feasible and viable – including for companies, which will need to provide much of this information. The research focuses on large, listed companies and their assets while acknowledging that there are different considerations for small and medium-sized enterprises (SMEs) and privately-owned entities. The report draws on engagement-led research focused on the users of company plans and data.

The report concludes that while substantial progress has been made, current frameworks have not been clear enough about the form best practice should take for information to promote a just transition. Furthermore, some initiatives have been led by company and investor needs with insufficient incorporation of systemic risks and of the needs of rightsholders.

Summary recommendations

• Investors should identify ways to boost the integration of information from just transition monitoring into their operations, including through their internal structures and processes, mapping just transition hotspots, and engaging with the policy and multistakeholder efforts described in our other recommendations.
• National and regional policymakers and regulators should embed just principles into transition monitoring policies. These should include domestic implementation for targeted transition areas, alongside adopting international guidance and standards for corporate disclosure.
• Multistakeholder working groups developing new monitoring frameworks should allow rightsholders to share and integrate their perspectives.
• Policymakers and industry associations should seek greater collaboration with worker representatives, investors and civil society organisations to establish forums to define transition pathways that can set metrics and thresholds.
• Just transition monitoring institutions – such as national climate coordinating bodies, climate and environment ministries, just transition observatories and national statistical agencies – should promote international sharing and consolidation of data, particularly on the impacts of transition activities.
• Companies should identify and report robust and meaningful just transition information. By doing so, they can attract investment from engaged investors and improve their own prospects by managing risks and opportunities. To do this, they should work closely with rightsholders, investors and their other stakeholders, and draw on support from advisory organisations.