Collaboration delivers practical Just Transition tool for asset managers

The Impact Investing Institute has published the Just Transition Critieria, a practical tool for asset managers that will assist them to design financial products that can deliver on the three critical elements of a just transition.

These are defined by the G7-backed Impact Taskforce as:

• Advancing climate and environmental action – including greenhouse gas emission mitigation, reduction and removal
• Improving socio-economic distribution and equity – through, for example, inclusive opportunities for decent jobs
• Increasing community voice – through, for example, engagement and dialogue with affected communities that are often excluded and marginalised

The Just Transition Criteria will also help asset owners to identify investment products and solutions that are aligned with a just transition.

According to Morningstar data, an estimated £2.2 trillion is invested in sustainable funds with a focus on climate. The Institute wants more than half of those funds to be invested over the next five years for a transition to net zero that combines climate action with creating and securing opportunities for people and communities to thrive in a transformed global economy.

The tool was developed in partnership with 21 global financial institutions – both asset managers and owners – who control more than £4 trillion of assets and who participate in the institute’s Just Transition Finance Challenge.

A wide range of NGOs and social investors were also canvassed in order to reflect their views on how the criteria could be most impactful.

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