The Just Transition Finance Lab has been launched in London on February 20th by the Grantham Research Institute on Climate Change and the Environment and the LSE. The Lab aims to change the current financing decisions for climate action by explicitly considering the social opportunities, risks, and dialogue needed for success. It will focus on research, advocacy, stakeholder engagement, and designing and testing solutions to embed within organizations.
The Lab’s main priorities include designing and deploying financial instruments and strategies, establishing effective metrics to measure performance and impact, identifying and achieving necessary policy reforms, and stimulating breakthrough innovations with best-in-class case studies. It builds on the foundations of the Investing in a Just Transition Initiative and the Banking on a Just Transition project.
The Lab’s work aligns with the global commitment made at COP28 to triple renewables and double energy efficiency, highlighting the immediate need for financing. The Lab’s report, “Financing a just transition,” emphasizes the historic opportunity to ensure that the clean energy expansion produces decent work, shared value for communities, and universal access to clean energy.
The Lab will initially focus on the United Kingdom and India, developing place-based just transition investment plans and sustainable finance innovations, respectively. It recognizes the importance of social justice and aims to create social conditions for workers in the Global South to thrive. The Lab also aims to mobilize global debt markets for a just transition by exploring the role of bond issuance in driving a just and inclusive transition to net zero.
The Lab’s mission is complemented by the formation of Just Energy Transition Partnerships (JETPs), which coordinate resources and technical assistance from the Global North to recipient countries vulnerable to climate change. JETPs aim to address social consequences of the transition through training, alternative job creation, and new economic opportunities.
To advance a just transition, the Lab emphasizes the need for policy reform and implementation, making it a bipartisan issue. It highlights policy responses in various jurisdictions, including labor and community provisions in the U.S. Inflation Reduction Act, Spain’s just transition program for coal, the wider EU just transition mechanism, and the JETP in South Africa.
The Lab aims to transform the global financial system to deliver action for a just transition, recognizing the need for a shift in mentality to integrate social factors into climate policymaking, corporate climate action, and financing.
