New research launched at PRI in Person offers four findings to achieve a successful, socially conscious transition.

  • Addressing the transition’s socioeconomic implications must be a government-wide effort, spanning from reducing emissions to securing affordable costs of living
  • The economic transition requires buy-in across diverse societal groups and sectors  
  • Policies should target the root causes of social discontent and economic disparities, and be underpinned by the respect of fundamental rights 
  • Investors play an important role in engaging with policy makers by supporting the development of socially conscious transition policies beyond allocating capital towards sustainable activities 

8 October 2024, Toronto: Today, The Principles for Responsible Investment launched a new policy research report that explores the social dimensions of the economic transition to net zero. Unveiled at PRI in Person, PRI’s flagship annual conference, the paper presents a policy framework aimed at supporting policy makers in identifying potential negative impacts of the transition, promoting policies that enable collective gains across all segments of society and securing broad-based support for the economic transition. The paper also aims to inform investor engagement with policymakers on social issues related to the transition.

“Investors play a pivotal role in supporting the transition by engaging with policy makers to develop socially conscious transition policies. This paper proposes a holistic approach to policy making for the economic transition, informed by the real needs and context within which key decision makers operate,” comments Margarita Pirovska, Director of Global Policy at PRI. “The economic transition is an opportunity to build a model for sustainable, inclusive, and resilient growth, but only if we account for the socioeconomic implications of the transition and broaden the scope of stakeholders to consider society as a whole.” 

The report reiterates the need for a whole-of-government policy approach to the economic transition. It presents a holistic framework that considers mainstream policies relevant to the transition and key levers to drive policy reform. Critically, it broadens the scope of stakeholder groups considered in analyses of socially conscious transition to include all parts of society which may be affected or have a role to play in the transition. This comes as the United Nations polled 77 countries, representing 87% of the world’s population, about their attitudes towards climate action. Globally, 80% reported wanting their governments to take stronger action in addressing climate change. At the same time, large parts of society are concerned about cost of living and climate-related taxation.  

Recent backlash against the net-zero transition, and the policies aimed at achieving it, has clarified the importance of accounting for the social effects of the transition from the outset of policy design. This paper builds off a previous PRI white paper on investing for the economic transition, which recognized the need for a clearer view on how socio-economic conditions and the protection of fundamental rights can affect the success or failure of policy interventions towards the economic transition. 

The PRI’s immediate priorities are to engage with policymakers at the international and national level to position the economic transition as a central rather than secondary goal of public policy. The PRI will continue to develop in-depth analysis of the state of play of transition policies across key jurisdictions and will work with its signatories and policy stakeholders to ensure such reforms contribute to creating an environment for responsible investment globally. 

Maria Nazarova-Doyle, Global Head of Sustainable Investment at IFM Investors said: “The global energy transition is all encompassing and can only be successful if people are at the heart of it. Yet, only about a third of national climate plans have any formal considerations targeting the social dimension of the energy transition. A step up in policy levers is urgently required to ensure this enormous societal transformation is smooth and successful. Efforts like this report from the PRI go a long way towards supporting developments in this area and it’s been a privilege to contribute to this work.” 

-ENDS- 

 

Media Enquiries: Rojin Kiadeh, Head of Press, PRI 

[email protected]
T: +44 20 3714 3167