Financing inclusive climate action in the UK: An investor roadmap for the just transition

The transition to net-zero greenhouse gas emissions needs to be an inclusive process, delivering social justice for workers, communities and consumers: this is the agenda of the just transition. This report, Financing inclusive climate action in the UK: An investor roadmap for the just transition,  sets out the role that investors can play in delivering a just transition in the UK. It seeks to understand the growing momentum in favour of a just transition and to illustrate the implications through a set of place-based examples from Yorkshire and the Humber, before setting out recommendations for investor action.

Summary points

• To deliver the UK’s new legislated target of reducing greenhouse gas emissions to net-zero by 2050, the country must strive for a ‘just transition’, inclusive of workers, communities and consumers. All parts of the economy will be affected and the net-zero transition will be strengthened by strong participation and engagement.
• For institutional investors, contributing to a just transition offers a way of reducing systemic risks, realising fiduciary duties, identifying material value drivers and generating positive social impacts. It also responds to the growing demand from end investors to connect their savings with societal benefits as well as financial returns.
• The just transition has become a recognised priority in the UK but as yet there is little experience of what it means in operational terms. To address this, our analysis is rooted in the place-based realities of the Yorkshire and Humber region (see maps). Our examples show that a shared approach is needed to evaluate business performance on the just transition; that there is a crucial role for local ‘anchor institutions’ with scale and community links; and that system-wide innovations, such as new regulations or markets, are needed.