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Blog | Tuesday July 2, 2024

Scaling Investment in Carbon Credits with Integrity

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Nature-based solutions (NbS)—often marketed and financed through the voluntary carbon market (VCM)—are critical in scaling up investments necessary to meeting the goals of both the Paris Agreement and Global Biodiversity Framework. However, credits as a mechanism have come under fire, largely due to the uncertainty in their ability to deliver on their stated promises (e.g., the amount of carbon sequestered), making them the target of scrutiny by both regulators and stakeholders.

A proliferation in guidance and regulations globally related to offsetting claims—such as the EU Green Claims Directive and the US’s VCM Principles—have made companies reticent to continue purchasing credits. Business leads are increasingly at a loss for how to frame and justify their investments since ‘carbon neutrality’ claims are by and large no longer allowed. Projects and purchases have also come under increased scrutiny by various stakeholders following a series of explosive articles over the past 18 months; while these rightly pointed out some shortcomings that need to be addressed, they unhelpfully frightened off investment from the credits market entirely instead of helping channel it into high-impact projects. 

At the same time, SBTi’s Board of Trustees recently announced that they will be exploring the use of “environmental attribute certificates” (which include carbon credits) to support companies’ Scope 3 emissions abatement. Leaving aside the governance of that revision, the substance of the announcement clarifies its current thinking and planned approach to considering any changes to its corporate net zero standard and how companies might utilize credits (or not) as part of their decarbonization journeys.   

Amid such uncertainty, the market for corporate purchasing of carbon credits has been volatile. For the first time since its inception, both 2022 and 2023 saw a contraction in the carbon market compared to 2021 levels. Many companies have been taking a wait-and-see approach, yet science tells us that we must invest immediately and at scale if we are to halt the twin climate and nature crisis. We cannot wait to invest in nature if we are to meet the goals of either the Paris Agreement or the Global Biodiversity Framework, and carbon credits stand as one of the readily available and scalable mechanisms to support both of these.

A host of frameworks, guidance documents, principles exist to help guide the purchase of high-quality carbon credits. Just a few of these include SBTi’s BVCM guidance, ICVCM Core Carbon Principles, VCM Claims Code, Tropical Forest Integrity Guide, and Oxford Principles. We can conclude two things from the diversity of guidelines: 1) there is overall agreement on what constitutes high-quality, such as the need for additionality and permanence, among other characteristics; but perhaps more importantly, 2) the nuances between the frameworks and lack of comprehensive and authoritative guidance leaves companies uncertain about how to engage with carbon credits with integrity for the long-term.

Given the convoluted market, BSR has developed an approach to support companies in carbon credit purchasing for the long term. We align standards and principles from existing frameworks to set a robust minimum standard. This is complemented by strategic visioning and alignment with your climate and sustainability strategies to ensure that purchasing works with internal goals and objectives. We codify the standards and criteria in a strategic framework, which we use to identify and vet potential providers that will enable companies to enact their purchasing strategy efficiently and with integrity. We also support companies in understanding how to communicate their efforts amid increased scrutiny.

High-quality carbon credits are critical for scaling finance quickly, and represent an impactful avenue for corporate investment in the short term. Credits can and should play a role in corporate climate and nature strategies, parallel to business transformation and overall decarbonization, especially in supporting companies’ beyond value chain commitments. Moving forward, BSR suggests businesses evaluate their current use of carbon credits.

Some key questions include:

1. What types of credits are you purchasing? What types of projects do the credits support? Does your current purchasing meet the (increasing) minimum standards for quality? Do your purchases support both climate and nature goals, or are they undermining them?
2. Why is your company investing in credits? If ‘carbon neutral’ claims are driving current purchasing, how might your company re-frame and rationalize credit purchasing? What role do credits play in mitigating your company’s impacts?
3. What claims are important for your company to make about credits? How might it need to update how it talks about its purchasing of carbon credits, such as via contribution claims (e.g., “we contributed to the restoration of 15,000 hectares of Brazilian rainforest”)?

The next 6 months are likely to see significant changes in the rules governing the use and application of credits. Members can get in touch to discuss how we can support your company in purchasing carbon credits with integrity in an uncertain environment, while also supporting internal goals and objectives.

Reports | Thursday June 20, 2024

Navigating the Rollbacks in Protection of Reproductive and LGBTQI+ Rights in the US

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The US has been undergoing a systematic rollback of reproductive and LGBTQI+ rights. Two years after the decision to overturn Roe v. Wade, abortion is illegal in 14 states and healthcare providers and others who help patients face criminal penalties. At least 23 states limit or ban access to gender-affirming care, while hundreds of other anti-LGBTQI+ equality bills were introduced in state legislatures in 2023. 

Financial services companies and other businesses that process healthcare-related payments must grapple with the repercussions of this fragmented legal landscape. Healthcare bans and restrictions complicate the operating environments for business and raise material risks. They also have a chilling effect on companies concerned with operating responsibly. Financial institutions are now exposed to complex ethical dilemmas, such as how to comply with the law while respecting the reproductive and LGBTQI+ rights of their customers, users, and workforce.  

BSR’s new report, Navigating Rollbacks in Reproductive and LGBTQI+ Rights in the US: A Guide for Financial Institutions, is a practical resource for financial institutions and anyone seeking to engage them on reproductive and LGBTQI+ rights in the US context. The guide includes insights on: 

• The rollbacks of legal protections for abortion and LGBTQI+ rights across the US;  
• How financial institutions may impact abortion and LGBTQI+ rights, specifically discussing data practices, handling of law enforcement requests, financial de-risking activities, lobbying efforts, and discriminatory or inequitable provision of financial services;  
• Material risks that result from failing to respect reproductive and LGBTQI+ rights; and 
• Practical recommendations and case studies for navigating compliance with the law while respecting human rights. 

Insights+ | Thursday June 20, 2024

The CSDDD: Compliance Meets Sustainability Ambitions

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Blog | Tuesday June 18, 2024

Space ESG Executive Program: Toward High-Impact Collective Action

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Space is changing: In 2023 a commercial rocket exploded over Texas, spreading debris over a natural preserve; in November 2023, a Michigan citizens' group helped defeat a proposal to build a spaceport site near Lake Superior; and new questions are arising about emissions of rockets in the upper atmosphere and the congestion of many satellites in earth orbit. The best opportunity to foster proven sustainability excellence in the space industry is now, to reduce cost, risk, and ensure the new space economy is as good as it can be.

The commercial space industry is undergoing rapid growth and change—forging an entirely new economy with unforgiving requirements. Consideration for the long-term impacts of the new space economy is fragmented and remains an emerging priority for the space sector.

Many industry experts haven’t prioritized sustainability practices due to a lack of demand from stakeholders, conflict with specific technology, and core mission objectives. The opportunity to build these practices into business plans is before us: we’re launching a rapid start program for space practitioners to upskill experts on the best ways to manage sustainability topics. 

The sector is developing at a rapid pace: already in 2024, there have been over one hundred successful orbital rocket launches. These launches are expanding satellite constellations to provide global broadband service, enabling future missions to Mars and the Moon, developing a working space tourism sector, and advancing supporting technologies for scientific exploration and industrial development. The industry also has the potential to create new impacts for people and the environment. 

For many legacy industries, managing the impacts of their activity on people and the environment has become standard practice. Investors, customers, and business partners have high expectations that externalities are well understood, and managed, and risks mitigated. The cost of failing to do so is too great: legal action from communities can delay production; reputations and contracts can be lost from sourcing conflict minerals; entire facilities can be shut down from climate-related events; and launch schedules can be delayed for years when communities are put at risk of launch failures. Strong governance of environmental, social, technical, regulatory, and other risk factors strengthen business plans and improve investment security.  

Yet, many actors in the commercial space industry remain behind traditional standards of sustainability governance. While some large, diversified companies have comprehensive sustainability programs, we believe there are a few fundamental reasons the sector is lagging overall: the operating environment is very different, and the sector is growing incredibly fast. Greenhouse gas emissions, for example, are a bedrock pillar of most company’s sustainability work, and an urgent global issue. For space operators, air emissions occur in traditional ways, as well as across all layers of the lower and upper atmosphere. Raw materials must be sourced from highly technical supply chains with geopolitical and human rights risks. They are also left to build up in the upper atmosphere upon re-entry. Meanwhile, investors are rushing to grab a piece of the $700B—some say $1T—industry as it outpaces global GDP growth. A rush of cash into a highly complex, technically challenging field under pressure to show positive value is a perfect storm for a lack of governance. 

Today, space companies are beginning to rise to meet the present and coming demand for integrated risk management. BSR’s research shows there is significant attention to the risks of orbital debris. The safety—of flight crews and communities on the ground—is widely acknowledged as a paramount concern. And like other industries, addressing climate risks, challenges in attracting and retaining talent, and managing risk in supply chains are affecting space business. Leaders we’ve spoken to are grappling with understanding how to manage these sustainability issues in the context of space. There are many urgent questions, and as any Chief Sustainability Officer might sympathize, not enough time and great complexity for which investments will generate the best return on reputation, risk, and performance. 

We have heard the call for collaboration to break down and prioritize actions, as well as a greater understanding of best practices and optimal implementation strategies. To catalyze sustainability proficiency for space industry leaders, we’re launching a Space ESG Executive Program.

This six-month program will bring together a group of practitioners to gain a common understanding of good governance, ESG regulation, demonstrate practices in ESG excellence, and develop a common statement for ESG practice in space. We believe this rapid, lightweight learning network will help bring clarity in decision-making, drive impact and lower the cost of action. We also believe it can spark the opportunity for long-term collaboration to create shared standards for ESG excellence in the space industry.

If you’re in the space sector, we’d love to talk. Reach out to us here.

Audio | Monday June 17, 2024

What the SBTi Battle Portends: The Decisive Decade Becomes the Dilemma Decade

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Aron Cramer, BSR President and CEO, chats with David Stearns following his latest blog about the public battle over the direction of the Science Based Targets Initiative (SBTi), the fundamental question behind this debate, and the tradeoffs companies face at a time when rapid progress on climate action is really needed.

Blog | Monday June 17, 2024

A Coherent Approach to Sustainability Due Diligence and Reporting: Making Sense of CSDDD and CSRD

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Voluntary frameworks for companies to assess, address, and report on their sustainability impacts on people and the planet have existed for decades. Nevertheless, mandatory EU requirements are bringing new attention to the governance and robustness of these processes and demanding companies harmonize their approaches across issues and teams.

CSRD and CSDDD requirements are aligned in spirit, with a clear overlap in their scopes and obligations. However, some differences exist. Implementation raises practical questions, and we recommend a pragmatic approach that capitalizes on efficiencies while acknowledging the unique requirements of each directive.

Key Similarities and Differences of CSRD and CSDDD

Five Questions for A Coherent Approach to Complying with CSRD and CSDDD 

As we work to help companies comply with these regulatory requirements, five considerations stand out:

1) How and when should companies identify actual and potential adverse impacts on people and the environment? 

The first step for companies in addressing and disclosing their impacts on people and the environment is identifying them. CSRD and associated guidance clarify that the materiality assessment of negative impacts is informed by the due diligence process defined in the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises. Due diligence can help a company identify impacts and affected stakeholders, whose perspectives should inform the materiality assessment of impacts.

The OECD Guidelines and UNGPs, which also form the foundation of CSDDD, call for meaningfully assessing actual and potential impacts at various levels of the business, across operational contexts, and throughout the value chain on an ongoing basis (e.g. in supplier management systems). This iterative approach to assessment expects companies to progressively deepen their understanding of their most severe and likely impacts for management and disclosure and provides increasingly granular input for regularly updated double materiality assessments required by CSRD. 

In practice, efforts to identify impacts as part of due diligence and as part of materiality exercises can overlap. For example, nascent due diligence processes may start with a corporate-level scan of likely impacts based on industry, geography, and business model. This resembles the high-level view of likely impacts developed as part of a materiality assessment. These processes often include conversations with a similar set of internal and external stakeholders.

As a result, practical questions may arise as to how to integrate and sequence these high-level assessments, noting that human rights and environmental assessments generally go further than impact identification and evaluation, and include an assessment of the measures taken to address these impacts.  Teams can benefit from a consistent approach that reflects a unified understanding of the value chain and stakeholder landscape and ensures efficient use of the information gathered.

2) How should companies prioritize impacts for action and reporting? 

CSRD and CSDDD adopt the same criteria—severity and likelihood—for prioritizing impacts, though the aim of the prioritization exercise is different: determining topics for disclosure under CSRD versus sequencing actions to address impacts under CSDDD. Companies will need to determine how best to understand the severity and likelihood in service of both objectives across a diverse range of topics. While prior corporate efforts to align with the UNGPs and OECD Guidelines provide experience in applying these criteria to human rights impacts, this approach is new for environmental teams, and it is less clear how criteria should be applied to these topics. Companies also need to determine how to consistently understand inherent (gross) and residual (net) impacts, the former being the basis for prioritizing action and disclosure on adverse impacts under CSDDD and CSRD. The assessment criteria will need to be harmonized across the organization to prevent inconsistencies in communication and action. 

The lack of data on a particular topic does not mean that an impact does not exist or is not severe, particularly if the means to collect the data are lacking. Where impacts are unclear, a risk-based methodology—that seeks to assess the likelihood and severity of impacts using proxy data and/or expert judgment—should be used to inform the company’s approach. 

3) Why and how should companies engage affected stakeholders?

CSRD and CSDDD stress the need to consider the perspectives of affected stakeholders (e.g., people impacted by the business, environmental defenders) and to communicate to them how impacts relevant to them are managed. While CSRD does not require stakeholder engagement, CSDDD requires—and provides criteria for—meaningful engagement. This includes providing stakeholders with relevant and comprehensive information, ensuring ongoing consultation, considering barriers to engagement, and ensuring stakeholders are free from retaliation and retribution.

Engagement can range from formal channels (e.g., consultations, interviews, surveys, and grievance mechanisms) to informal day-to-day interactions (e.g., regular meetings with customers, town halls, or community roundtables). Companies should also engage stakeholders through their legitimate representatives (e.g., trade unions or civil society organizations) and ensure engagements are tailored for specific groups. For instance, where Indigenous Peoples may be impacted, engagement may involve good faith processes of free, prior, and informed consent. 

An effective stakeholder engagement approach should build trust and avoid the need for duplicative information gathering. Engagement with affected stakeholders should be integrated at each step of due diligence (as required by CSDDD), and insights from engagements should inform a company’s reporting (under CSRD), closing the due diligence lifecycle by accounting for its impact management to stakeholders.

4) How should companies address impacts? 

While CSRD does not require companies to act on material impacts, it does require them to report on how they manage impacts in some detail. CSDDD requires companies to act on impacts and provides a clear operational framework to help them understand what appropriate action looks like based on the company’s involvement in harm, such as ceasing this activity and providing remedy. It points to governance and management systems that should be deployed to prevent, mitigate, and remediate adverse impacts (e.g., policies, effective grievance mechanisms) as well as ways they should use leverage (e.g., supplier contracts, industry and multi-stakeholder initiatives). Recognizing the vast differences between companies, industries, operating contexts, and issues, CSDDD leaves flexibility for companies to tailor their actions to address impacts.

5) Who should be responsible for oversight and execution of sustainability due diligence, including reporting? 

Through CSRD and CSDDD, sustainability due diligence has become a legal responsibility for management and for board oversight with penalties for companies who fail to comply. Ensuring an effective response calls for clear governance structures, cross-organizational collaboration, and access to expertise. Boards may need to add members with relevant subject matter expertise or establish advisory bodies. Senior management should have formalized responsibilities and likewise draw on internal and external sustainability expertise to deepen their understanding of the company’s sustainability impacts and what good compliance looks like.

We hear from companies that new compliance pressure has the potential to become an overwhelming distraction. While this is understandable, our experience helping companies implement each step of due diligence and impact-based materiality reporting gives us hope that the regulatory baseline can become a springboard for ambitious yet pragmatic action on corporate impacts on people and the environment.

BSR’s multidisciplinary team takes a holistic approach to CSRD and CSDDD compliance strategies, helping companies to develop approaches that are aligned and integrated across the value chain. If you’d like further information, please don’t hesitate to reach out.

People

Katharina Doets

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Katharina works with the RISE partnership team to support and expand the network of RISE members and stakeholders.

She supports RISE members – brands, buyers, suppliers, and vendors in the apparel, footwear, and home textile industries– to promote gender equality and empower women workers throughout global supply chains.

Prior to BSR, Katharina managed strategic partnerships for the Center for International Media Assistance as assistant program officer at the National Endowment for Democracy in Washington D.C., focusing on the role of independent media in the creation and development of sustainable democracies.

Katharina holds an MA in Human Rights from University College London, as well as a BA in International Education and Development from the University of Sussex.

Katharina is a fluent English and Dutch speaker.

People

Saad Khan

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Saad Khan is an Associate on BSR's Financial Services and Climate Change teams.

He lives in New York and grew up in India. He was previously an Associate Director on the Investments team at the College Board, where he deployed the internal impact-venture fund focused on education and workforce development, in addition to performing M&A and portfolio management for the endowment. Before that, he was an Investment Analyst at Rida Capital, where he focused on financial inclusion and FinTech in India.

He holds a BS in Finance from Mercy College.

Blog | Wednesday June 12, 2024

What the SBTi Battle Portends: The Decisive Decade Becomes the Dilemma Decade

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The public battle over the direction of the Science Based Targets Initiative (SBTi) as it considers the role and integrity of carbon offsets and other market-based solutions is extremely important.

The dispute also has larger significance: it is also a proxy war reflecting the growing tension between slow and steady business progress on the one hand, and the need for more profound change based on what climate science tells us is needed on the other.

It is highly likely that this tension will grow in the years ahead. Almost halfway through the “decisive decade” during which it’s broadly recognized that the world needs to reduce emissions by 45 percent compared to a 2010 baseline, two undeniable realities are clashing.

First, companies, investors, governments and other key actors have made commitments and are working toward them, in ways that were unimaginable a decade ago. This is to be celebrated and advanced. 

At the same time, emissions are not only far off the Paris target, but they also remain above 2010 levels, and continue to increase, albeit by a slowing rate. 

The SBTi battle is unfolding amidst these two competing realities, as the debate between “pragmatism vs. ambition” intensifies. 

We should not be diverted by the breathless reporting on who said what to whom. The real question is more fundamental: how will we achieve the level of progress, that’s needed within existing structures and initiatives, to achieve the emissions reductions the science makes clear are a non-negotiable?

The dawn of the 2020s saw the explosion of commitments and collaborations, promising new efforts to make good on the vision of the Paris Agreement. A few years, one pandemic, a disrupted energy market, and multiple geopolitical conflicts later, the reality of what it will take to deliver on these goals is forcing hard decisions. 

In short, the decisive decade is in some ways becoming the dilemma decade, as companies come to grips with significant tradeoffs arising from new developments and perspectives. 

Reporting and Disclosure: The rise of CSRD and other mandatory reporting requirements is producing more transparency, enabling the allocation of capital to the most sustainable companies, and ideally, comparability in reviewing companies’ relative performance. These new requirements are also diverting time and money away from performance towards measurement, creating disincentives for companies to make ambitious commitments, and putting pressure on “social” issues where verification is more challenging.

Scope 3: On a related front, the need to address and report on Scope 3 emissions is clear: that’s where most of large companies’ emissions are. Many companies have made ambitious Scope 3 commitments as part of their net-zero strategies. Making good on these commitments, however, depends on forces that are sometimes out of the control of the companies making them. Slow progress towards a cleaner energy system in Southeast Asia, amongst other regions, long timelines for decarbonizing hard to abate sectors, and supply chains that often fail to create supplier incentives to decarbonize all mean that progress on Scope 3 is halting at best.

Unknown Unknowns: The iconic—some would say notorious—formulation by former US Defense Secretary Donald Rumsfeld comes to mind as well when considering dilemmas. The rise of generative AI has sparked energy hungry and emissions producing data centers that have laid waste to some companies’ climate targets. Can AI also deliver climate benefits? Absolutely, but the race to develop and deploy new technologies has sparked a problematic “emissions now, reductions later” mindset. 

In short, the tradeoffs reflected in the simmering debate within the SBTi are also found elsewhere. Their origin is actually quite simple: they reflect the non-linear nature of the energy transition, and the constant battle between pragmatists and those calling for all out ambition.

The tension between pragmatism and ambition will always be present. For the time being, the pragmatists appear to have more momentum on their side, not least as companies are adjusting to the environment where regulatory compliance plays a new role. The dilemmas companies face are real. We can handle a short pause to learn from these dilemmas, consolidate gains, and draw new lessons.

While that may seem rational in the immediate term, it is not sufficient to meet the challenge to make decisive, and rapid, progress.

The debate on how to reconcile the need for maximum mitigation with offsets with real integrity is important not only to the SBTi; it also represents a broader battle between ambition and pragmatism. We ultimately need both: without ambitious—and public—goals, progress will be insufficient. Without the hard work of translating the goals into action; they will be nothing more than words on a page. 

Blog | Wednesday June 12, 2024

Advancing a Just Transition: Lessons from Company Practices

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Sustainability teams face numerous internal hurdles when seeking to gain traction on advancing a just transition. Obstacles include breaking down internal silos, overcoming opposition and lack of knowledge, combatting resistance to incorporating just transition principles into policies and practices, and ensuring sufficient capacity and resources for implementation. 

The challenge to ensure a just, fair, and inclusive transition is intertwined with various agendas in environmental and social sustainability, including (but not limited to) reducing greenhouse gas emissions, adapting to climate change, protecting biodiversity, ensuring respect for human rights, and reducing inequality. Advancing a just transition requires bridging these efforts to cohesively prioritize people throughout the climate transition process.  

In our work with companies, BSR has observed that in many large, multinational companies, net-zero strategies are driven by teams of dedicated climate experts, sustainability efforts are spearheaded by sustainability program managers, and social risks and impacts are managed by social performance and human rights practitioners, with little engagement across silos. The fundamental challenge lies in aligning these distinct teams to collaborate effectively and work towards the common goal of achieving a just transition through a comprehensive, people-centric approach that harmonizes climate action, environmental protection, human rights considerations, and social equity measures. By fostering cross-functional collaboration and aligning objectives, companies can more easily address the multifaceted challenges posed by the energy transition. 

Practitioners often struggle to understand how to initiate just transition efforts, break down internal silos, get the right people engaged, and gain the internal buy-in needed to advance the agenda. Additionally, given recent regulatory changes, companies are focusing on the burdensome effort required to comply with mandatory compliance measures, which is leaving little bandwidth for other priorities. 

Working with companies to advance the just transition, we have seen that there is no one-size-fits-all approach to advancing the principles of a just transition within a business, as each company faces unique challenges and must tailor its strategy accordingly. We have, however, identified a few company actions that are successfully moving the agenda forward that may serve as inspiration or sources of learning for other practitioners working to advance just transition within their companies.  

Lessons Learned on How to Advance the Just Transition Inside a Company 

Secure an Executive Champion 

A strong executive champion who can drive the just transition agenda forward within a company has proven to be a critical success factor. Their support of just transition can complement other topics for which they are champions, such as human rights or climate justice. Companies with senior leaders, such as the CEO or a dedicated sustainability executive, that are champions of just transition are well-positioned to overcome internal resistance, resolve deadlocks, and create and maintain momentum for their just transition initiatives. Conversely, organizations that have lost executive-level champions or have yet to secure dedicated sponsorship risk stalling progress and facing challenges in gaining traction for their just transition efforts. This highlights the importance of cultivating leadership support and ensuring that the just transition imperative is firmly embedded within the organization's strategic priorities. 

Integrate Just Transition into Existing Strategies and Frameworks 

Many corporate climate transition plans fail to make a direct connection between human rights and the energy transition. Given this, some companies are exploring ways to incorporate just transition principles into their existing climate transition, net zero, energy transition, or broader sustainability strategies and frameworks.  

This integrated approach allows for just transition considerations to be woven into the fabric of the organization's overall sustainability efforts, rather than existing as a separate, siloed initiative. Companies are taking varying approaches, from developing standalone just transition strategies or position statements to integrating the principles across multiple policies and strategies. While a dedicated just transition strategy or position can provide a clear and focused commitment, integration into other strategies and frameworks has allowed some companies to align their just transition ambitions with the company’s existing efforts. A clear benefit of having just transition interwoven into other strategies is integrated communication with stakeholders (whether mandatory or voluntary).  

Once these necessary elements are in place, practitioners will be better positioned to engage in targeted communication and training to align diverse internal stakeholders and promote a more holistic understanding of how the company can support a just transition, both as a process and an outcome. As a result, many practitioners have made it their priority to target capacity building and awareness towards business lines and teams, who are on the front lines of implementing just transition efforts. 

Establish Formal and Informal Governance Mechanisms 

Embedding just transition into formal decision-making structures, such as cross-functional steering committees and working groups, can be an effective approach for driving the just transition agenda forward. These governance mechanisms bring together representatives from various functions, including sustainability, legal, procurement, human resources, and communications, fostering cross-functional alignment on just transition strategies and initiatives. However, while these formal governance structures bring together various internal functions, they typically lack regular representation from a company’s business lines. That is why, in addition to formal decision-making structures, less formal channels, such as working groups without decision-making authority, can play a useful role in building connections with and across business lines and encouraging broader discussions on just transition principles. These informal networks can help raise awareness, build understanding, gather diverse perspectives, and ensure buy-in, laying the groundwork for more formal governance processes over time. 

Leverage Successful Case Studies 

Showcasing successful own-company case studies and best practices related to just transition can be a powerful tool for building internal support and momentum. Real-world examples that demonstrate the positive impact of incorporating just transition principles – this includes but is not limited to early and transparent engagement with stakeholders, social dialogue with workers and unions, and responsible site decommissioning – can help illustrate the value and feasibility of these efforts. Companies that have leveraged compelling case studies have found success in securing additional company buy-in and have been able to drive the just transition agenda forward within their organizations. Case studies can be important in both demonstrating the business case but also offering clear insights and direction on what implementation can look like which can inform future company processes and expectations. 

Take Action 

Advancing a just transition is a challenge but one companies across sectors need to embrace. For resources on advancing a just transition visit the Just Transition Resource Platform and for guidance on planning for a just transition see BSR’s Just Transition Planning Toolkit. For support advancing the just transition within your company contact us.