Investors will play a critical role in the implementation of the Paris Agreement and they are increasingly taking action to respond to climate change risks and opportunities. However, most investor strategies on climate change have yet to incorporate a robust social dimension. The transition to a zero-carbon economy needs careful management so that the transition is not just environmentally effective and economically efficient, but also socially inclusive.
There are a range of reasons why investors could consider an active role in the just transition, which taken together provide a compelling case for investor action. Investors could take action to promote the just transition in four different areas: investment strategy, investment engagement, capital allocation and policy dialogue.