UK

The United Kingdom will be a key geographical focus for the Just Transition Finance Lab. Continuing previous work by Lab members, the UK research programme will focus on how to accelerate the movement of capital behind a transition to a green, inclusive and resilient economy. This research programme will build on the strengths of the Financing a Just Transition Alliance (FJTA) and Place-Based Climate Action Network (PCAN) (described further below), to build a consistent (1) community of practice, (2) support for place-based investment and examining different (3) policy and market frameworks.

(1) Building a community of practice

• The Financing a Just Transition Alliance was established in November 2020 by the Grantham Research Institute. It brings together over 50 banks, investors and financial institutions with universities and trade unions to translate the growing commitment to a just transition across the financial sector into real world impact. The Alliance presented the findings of the first year of its collaboration at COP26. One result of its work has been the establishment of the Just Transition Working Group (which the Grantham Research Institute co-chairs) as part of the UK Government’s Transition Plan Taskforce(TPT – see below). The Alliance has been responsible for particular specific specific guidance also on the just transition (e.g. Sowing Seeds: How Finance can support a just transition in UK agriculture)
• We will be evaluating how the Lab can work most effectively with this UK-based community of practice over the first half of 2024. In the meantime we will be continuing to work with particular sub-sectors of finance, including investors and banks.

(2) Supporting place-based investment

• The Place-Based Climate Action Network (PCAN) is about translating climate policy into action ‘on the ground’ to bring about transformative change. The Lab team has worked with PCAN colleagues at Leeds University and Edinburgh Climate Change Institute (ECCI) to develop research around the ‘missing middle’ of technical capacity needed to connect capital markets to local climate transitions. The team has also partnered with 3Ci, Jacobs and PwC to produce research looking at barriers to place-based investment and guidance on structures needed.
• From Westminster to Cumbria – attracting investment into local climate transitions. In 2024, the Lab will lead a project in partnership with Westminster Council and Cumberland Unitary Authority to advance the investment readiness of a green prospectus in these diverging localities. The two organisations have the same goal – to mobilise suitable investment for their local plans for a just and green transition – but they differ in governance, project type and land use (i.e. rural vs. urban). Assessing this contrast will provide valuable insights into the variation of requirements across different places in the UK for green investment.
• Scottish Just Transition Commission. Nick Robins (Professor in Practice and Head of the Lab) will continue to contribute to the Scottish Just Transition Commission throughout 2024.

(3) Policy and market frameworks

• UK Government Transition Plan Taskforce (TPT). The Lab team will lead on the final output of the TPT Just Transition Working Group in 2024, which will provide a technical landscape review of just transition indicators within prominent existing transition-focused guidance and principles. It aims to provide a set of just transition metrics and indicators based on these exiting frameworks, which will be useful for issuers who are starting to, or due to start, reporting on the just transition as part of their overall transition planning. The TPT’s sector-neutral and sector-specific transition plan guidance can be found here.
• Green+ Bond Framework. The Lab team alongside the Impact Investing Institute (III) and the Green Finance Institute (GFI) co-authored a framework document guiding EU sovereign and corporate issuers on how to deliver green bonds with social co-benefits. This contributed to the UK government including measurement of social co-benefits within its own Green Financing Framework for sovereign green bond issuances.