Financing a Just Transition
14th November 2019
On 5 November, Bristol Green Capital Partnership co-hosted a ‘Financing a Just Transition’ workshop with University of Bristol’s Cabot Institute, Bristol Green Capital Partnership, LSE’s Grantham Research Institute (GRI) and Leeds University’s Sustainability Research Institute. Lizzi Testani, Chief Operating Officer for Bristol Green Capital Partnership, shares highlights from the day:
Stakeholders from the local finance and investment sector alongside Bristol City Council, Bristol & Bath Regional Capital, TUC South West, The Schumacher Institute, Bristol Pound, Bristol Credit Union and Bristol Green Capital Partnership came together to explore the question: “How can banks and investors best support a just transition in the UK, Bristol and the West of England – in other words, help to build a net zero city, region and economy that’s inclusive for workers, communities and consumers?”
What is a ‘just transition’?
The notion emerged from the trade union movement and invites us to manage the socio-economic impacts of the transition so that new prosperity and the effects of decarbonisation is shared fairly , this includes securing workers’ rights and livelihoods when economies are making the necessary shift to sustainable and low carbon production.
Stranded assets, stranded workers and communities…
‘Stranded assets’ is a well-known term referring to the unanticipated loss of value of financial assets as the global economy moves away from fossil fuels such as coal and other hydrocarbon resources.
The notion of ‘stranded workers’ applies to those employed in these sectors or industries, whose livelihoods and communities would also be detrimentally affected by the transition to a low carbon economy.
Research from LSE’s Grantham Research Institute for Climate Change and the Environment estimates that nationwide nearly 1 in 5 jobs will be affected by the net zero transition and areas most likely to be affected are the East Midlands, West Midlands and Yorkshire and the Humber. The resulting report anticipates these risks, seeks opportunities for making a just transition and identifies how investors and banks can play an active role. It also notes that whilst the skills needed for some jobs will change, requiring re-skilling, nearly 10% of workers nationwide have skills where demand will grow.
Identifying the opportunities for Bristol
The discussion focused on how banks and investors might adopt new approaches to play an active role in driving a just transition in Bristol and the region. In summary:
- Bristol is already pioneering many aspects of a just transition in comparison to other cities in the UK.
- Whilst the challenges are complex, Bristol is well placed and ‘has the money’ but it would need to be mobilised.
- Many of the innovations in Bristol’s economy will be driven by demands from the local community and market, particularly from the younger generation, for more ethical and sustainable investment and financial products – in fact, many are already available.
- Increased transparency within the banking and finance sector will enable more ethical and sustainable choices too – ‘green mortgages’ and sustainable loans, for example – but new product developments and approaches need to be made a priority by banks, building societies and regulators.
- It was widely noted that inequality may slow or impede the transition to a low carbon economy, let alone a just one. Socio-economic circumstances mean that not everyone has the time or space to understand and consider the impacts of their financial decisions. Meanwhile, individuals on a low income often end up paying more for goods and services.
- Resourcing Bristol’s citizens to play an active role in the just transition and to participate in ethical and sustainable choices – by, for example, ensuring employers pay the Living Wage, and enabling greater access to the environmental issues and natural environment for BME communities – will help make the transition more likely, more just and much quicker.
Thank you to Dale Southerton (Cabot Institute for the Environment), Alex Minshull (Bristol City Council), James Berry (Bristol Credit Union), Mohammed Saddiq (Chair, Bristol Green Capital Partnership), Rebecca Pritchard (Triodos), Faith Ward (Brunel Pension Partnership), Nick Robins (LSE Grantham Institute) and Stephen Pegge (UK Finance) for sharing their perspectives on the challenges and opportunities for Bristol to make a just transition.
We are looking forward to receiving findings from the workshops which will focus on the practical next steps and lessons that can be learned from other cities, regions and nations in the UK.
LSE Grantham Research Institute for Climate Change and the Environment Report: Banking the Just Transition in the UK
LSE Grantham Research Institute for Climate Change and the Environment Report: Investing in a Just Transition