The role of business in the process of just transition
The green economy is an alternative vision for economic growth and development. It aims to provide solutions to the economic and climate problems facing humanity. The green economy is based on a transition from long-standing high-carbon production and consumption patterns that harm human societies and ecosystems to sustainable zero-carbon production patterns. The International Chamber of Commerce defines the green economy as a model in which economic growth and environmental responsibility go hand in hand and are interdependent.
The principles of the transition to a green economy are set out in major international
agreements on tackling climate change. The Paris Agreement, signed by 195 countries in 2015, sets targets to reduce global warming and limit greenhouse gas emissions. The overarching goal of the Paris Agreement is to limit global warming to below 2° above pre-industrial levels by 2050. Limiting it to 1.5° would significantly reduce the number of people at risk of climate-related disasters and poverty. The UN 2030 Agenda for Sustainable Development and the UN Global Compact initiative also envision the development of sustainable economies at the heart of which is the care for the people and the environment. The transition to sustainable economic models needs to be guided by the principles of protection and respect for human rights.
The European Union's Green Deal
The European Green Deal is the European Union’s plan to transform its economy towards sustainable development, aiming to make Europe the first climate-neutral continent. The main objectives are to reduce emissions by at least 55% by 2030 compared to 1990 levels and to decarbonise the economy.
‘Fit for 55’ is a set of proposals to revise and adapt the EU legislation to ensure that EU policies are in line with climate targets. It is essential to ensure a just transition with care for the people, to preserve the competitiveness of industries and maintain the EU’s leadership in the global fight against climate change.
A just transition
The Green Deal is being implemented in parallel with the Just Transition Mechanism. The Mechanism aims to implement the transition in a fair way with concrete measures to help all people, business enterprises, industrial sectors, countries and regions of the EU affected by the transition to a green economy. The mechanism aims to ensure that no one is left behind in the transition to climate neutrality. The Mechanism will take concrete measures tailored to the needs of people in the regions most affected by the transition to a green economy.
The concern of residents and workers in coal-mining regions is understandable, but green economy opportunities offer not only training and retraining possibilities but also improved quality of life through a clean and healthy environment. The social challenges of transition require responsibility and commitment from states, businesses and individuals to ensure that the Just Transition Fund reaches people in need, who must have the opportunity to participate and be engaged in the process of transforming declining sectors and transitioning to sustainable, zero-carbon production models.
Just Transition is not just about company employees, it also affects larger communities of people. Engaging the state and business enterprises in the just transition process and applying human rights principles are key to creating social dialogue and achieving equitable solutions that respect all parties involved. By exercising their right to access information and to participate in the just transition process, all stakeholders (workers, their families, and the community) can be involved and have the opportunity to participate in a transparent process. The Guiding Principles and the due-diligence guidelines provide practical guidance on stakeholder engagement and the benefits for all: state and local government, business enterprises, employees, rights-holders and the community.