Elevating Equity as a Top Priority
A just transition to a green economy requires solutions that not only slow global warming but also lead to accessible, equitable, and quality jobs for a sustainable future.
A Just Transition Opens the Door to Economic Advancement
“Financial markets are beginning to realize the risks of inaction and the opportunities for action, as exemplified by the more than 250 financial firms — with over $88 trillion in assets — that have pledged to become net zero entities.” Source: The White House
Let’s Start With a Definition
To understand what we mean when we say “just transition” we look to the International Labour Organization s definition: “A just transition means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind.”
Today we have a chance to be a catalyst for shared prosperity. It’s possible to drive an energy transition that cuts carbon while ensuring jobs and skills are increased, not lost — because investing in low-carbon innovation and climate-resilient workforces is how we’ll accelerate climate action.
A just transition involves maximizing the social and economic opportunities of climate action, while minimizing and mitigating any disparities — including through effective social dialogue among all groups impacted, and respect for fundamental labor principles and rights.. The Time for Action is Now
“Climate change poses serious and systemic risks to the U.S. economy and financial system,” the White House warns in its 2021 report on how climate change is already impacting American businesses and jobs.
Businesses have been heeding that warning, looking for ways to reduce risks to their local and global supply chains and operations by transforming their business models. This is creating opportunities for rethinking how work is getting done and by whom.
The White House report makes the case for a just, inclusive transition to climate-resilience that leverages “the full talent and creativity of all Americans by elevating equity as a top priority in all policy decision-making.”
In other words: a just transition to a green, climate-resilient economy is not possible until we open the door to everyone. Leveraging Skills to Meet Our Opportunity for a Just Transition
A just transition to a green economy will not happen spontaneously. It requires concerted efforts from leaders and stakeholders representing workforce systems, education, training pathways, policymaking, and community development. To achieve this, we must prioritize economic activity that aligns with long-term environmental and social impacts.
In a future where all jobs contribute to a green economy, we acknowledge that jobs are at risk of displacement if they are not yet considered deeply green. A just transition to a carbon-neutral future will be achieved when all jobs are quality green jobs, with strong measures of job quality, and through the intentional integration of green skills.
A just, inclusive transition to climate-resilience should leverage “the full talent and creativity of all Americans by elevating equity as a top priority in all policy decision-making.” Source: The White House
What challenges and opportunities exist for both employers and employees, and how best do we meet their needs as the shift occurs?
By Michelle Armstrong Ares Management Managing Director, Head of Philanthropy
“The 'just' in 'just transition' is contingent on context. Justice is not a 'one size fits all' concept, but instead highly nuanced depending on the populations and geographies to be considered when addressing climate change."
Readying people for good-paying jobs – including green jobs – is an Ares Foundation funding priority intended to help accelerate equality of economic opportunity.
Ensuring a just transition is important for all countries at all levels of development. It is also important for all economic sectors — by no means limited to energy supply — and in urban and rural areas alike. We probed that and related topics at the annual in-person meeting of the CREST Initiative with JFF, WRI, and WRI India held in February 2024.
India not only boasts the world’s fifth-largest economy, but is also the third-largest greenhouse gas emitter and third-largest electricity consumer. Given the effects of the country’s rapid urbanization on climate and the environment, we could think of no better place to gather than Mumbai.
Furthermore, a primary goal of CREST is to help reskill 1,000 micro, small and medium enterprise (MSME) workers in India’s auto and textile sectors through our collaboration with WRI India, including to promote global supply chain equity and mitigate worker displacement.
In addition to brainstorming sessions on how private market stakeholders can best support the different dimensions of “just,” Dr. Arun Panda (Senior Fellow, WRI India and Former Secretary, Ministry of MSME, Government of India), Amit Kumar (Senior Fellow, WRI India), and Anita Sharma (Former Consultant, International Labour Organization) joined us to discuss trends in the nation’s labor market and MSME workers’ skills that align with the green transition in India.
Our subsequent panel with MSME owners and cluster association leaders helped set the stage for the following day’s site visit to SS Natu Plastics & Metals Pvt. Ltd., a small enterprise in Thane that manufactures high-efficiency motors and controllers for a wide range of applications, including the automotive, power, aerospace, commercial and defense sectors.
So, what did we discuss, hear and learn over our two days together?
The “just” in “just transition” is contingent on context. Justice is not a “one size fits all” concept, but instead highly nuanced depending on the populations and geographies to be considered when addressing climate change.
Engaging the private sector to help prepare and reskill a green workforce requires identifying specific actors who can play a pivotal role. These may include, for example, chief procurement officers and chief sustainability officers given their environmental focus when making decisions for their organization. These may also include investors who seek to do business with corporates that strive to strategically problem-solve climate change by humanizing the efforts.
Developing and developed economies face similar opportunities and challenges in enacting climate change workforce strategies and can learn from one another. For example, WRI India and JFF each support entrepreneurs through CREST. This is because both organizations identify entrepreneurs as critical stakeholders when it comes to delivering training that promotes sustainability and employing populations like women and people of color that have been frequently overlooked for green jobs.
And with that in mind…
Opportunities abound for those historically shut out of the green economy. While LinkedIn’s 2023 research revealed that just one in 10 women possesses green skills and 2021 World Bank data point out that only one in five women in India “formally” works, women comprise 80% of SSNPM’s employees. Among them is the owner’s daughter, who recently transitioned from her senior-level corporate job in New Zealand to help her father innovatively build and further green his business.
External support for green skilling is imperative to complement on-the-job training that employers provide. Training like WRI India delivers to MSMEs through CREST on topics such as climate risk awareness and energy efficiency can help protect the environment and increase productivity. The instruction goes well beyond the kind of training that MSMEs like SSNPM provide new hires over a few months. For example, WRI India provides skilling to operate computer numerical control (CNC) machines, which require reduced power and consume less water for cooling and lubrication. This is the type of learning opportunity that MSME owners need and want for their employees.
“Please continue the training. I have seen noticeable changes that are going to enhance [my business].” As one MSME owner made clear, training like WRI India makes available — thanks to CREST — is highly desirable. Owners expressed few worries that workers will seek other employment opportunities once they develop new sills because, in their view, what matters most is that everyone wins when best practices in sustainability are learned and applied.
Earth Day 2024 marks the two-year anniversary of CREST. The work continues, so please watch for ongoing updates and posts about this initiative.
"Developing and developed economies face similar opportunities and challenges in enacting climate change workforce strategies and can learn from one another."
Women Workers in Indian MSMEs: A Challenge for a Just Transition
Increasing women’s participation in the labor force is an economic development priority in most countries. In India, for example, there is an outsized need and opportunity to support women in the micro, small, and medium enterprise (MSME) sector throughout the low-carbon transition.
The aim is to equip them with the green skills, climate finance, and technologies required for disrupting traditional occupational segregation of women in the sector, so as to transition to a sustainable and just economy.
In addition to gender discrimination in the workplace, women often bear the bulk of traditional caregiving for the young, the sick, and the elderly. As a result, many women-owned MSMEs tend to be home-based.
A just transition is an inclusive transition.
This report from WRI offers remedies to begin addressing the pressing need for training, support, and other safety net measures specific to women in India to make them a valuable part of the transition ecosystem.