Global

The $500 trillion just transition challenge is a global one. It has a fundamental geographical element: investment needs to be reallocated from the pools of capital that largely reside in the Global North to the climate and nature priorities that are disproportionately located in the Global South. In the policy sphere, only 31% of governments -- as signatories to the Paris Agreement and architects of the global financial system -- have committed to addressing the socioeconomic impacts of climate action in the implementation of their Nationally Determined Contributions. International cooperation, national just transition pathways, financial regulation, net zero financial initiatives, and stakeholder-led processes are all necessary in laying the foundation for financing the just transition.

Prior to the formation of the Just Transition Finance Lab, our research team at the Grantham Research Institute published several outputs aimed at moving forward global policy dialogues and discussions on a just transition (e.g. see this scene-setting presentation given by Nick Robins at COP28). In particular, work on the Inevitable Policy Response with our colleagues in the Climate Change Laws of the World team has been important in helping institutional investors better act on the social risks and opportunities linked to the requisite policy responses to climate change.

The Lab will build on these policy outputs and others to develop a global policy research programme focused on:

• Giving practical expression to financing just transitions in the context of the UNFCCC Work Programme on Just Transition (JTWP). Agreed at COP28, the JTWP intends to “assess, design, and scale up pathways to achieve the goals of the Paris Agreement in a way that is just and equitable for all, and leaves no one behind.” Since contributing to the First Annual High-Level Ministerial roundtable on just transition, the Lab is working closely with stakeholders and multilateral forums in this area.
• Engaging with market-specific and global standard setters and regulators on how to incorporate just transition considerations into disclosure frameworks. Measuring and disclosing companies’ work on the just transition is important for tracking progress, investor stewardship and capital allocation.
• Exploring frontier issues and themes such as stakeholder dialogue, intergenerational justice, and migration in financing the just transition. The Lab is looking forward to exploring these areas alongside our partners.