This report introduces the ‘Just Transition Criteria’ that allow investors to align products and solutions towards a global just transition to net-zero, without leaving anyone behind. It acknowledges the existing frameworks, standards, labels, and initiatives that the financial industry currently uses and seeks to fill gaps in effectively improving alignment with the three critical elements of a just transition: climate and environmental action, socio-economic distribution and equity, and community voice.

The authors provide detailed minimum expectations for each of the Just Transition Criteria which must be met for a product to be considered aligned. They also offer further considerations for implementation illustrated by examples. Users who intend to implement the criteria within products are encouraged to look at the criteria in order, as the product-level commitments under Criterion 1 should drive the implementation of the other two criteria.

To ensure the successful implementation of the’ Just Transition Criteria’, asset managers are encouraged to pay particular attention to the coherence of selected safeguards and key performance indicators included in the criteria. The criteria are flexible enough to adapt to a fast-changing context, while maintaining integrity, and will be iterated regularly to ensure relevance and encourage broad adoption.

The report suggests that managers should look at existing high-level frameworks, such as the OECD Guidelines for multinational enterprises, UN Guiding Principles on Business and Human Rights, and International Finance Corporation’s Performance Standards, when providing a statement of adherence to relevant frameworks.

Managers are also asked to consider incorporating stakeholder feedback, as well as incidents of violations involving the rights of Indigenous peoples when assessing and monitoring potential material negative impacts and harmful consequences of investments to any of the critical elements of a just transition.

Finally, managers are encouraged to specify the environmental, social, and community-related safeguards put in place for investments within the product, as well as articulate how they plan to embed the community voice into the investment strategy and process.

Overall, the ‘Just Transition Criteria’ provides a useful framework for investors to align their products and solutions with the three critical elements of a just transition and work towards a net-zero world where nobody is left behind.