Just transition will need to harness finance services
March 5th, 2024
The just transition will need to rely on the finance sector to ensure the global transition to a resilient, net-zero and nature-positive economy is done in a socially inclusive and fair way, a new report has found.
A report by the London School of Economics’ Just Transition Finance Lab called for a “shift in direction” for financial practice for the sector to enact change.
The report outlined the geopolitical urgency of the just transition and the growing number of initiatives seeking to harness finance to address the challenge.
Nick Robins, executive director for the lab, said: “To succeed, the lab must be a collaborative venture, where financial leaders come together with others to explore these knotty challenges and the crucial role their industry can play.”
The lab launched in February 2024, at a time of increasing acknowledgement of the imperative of the just transition from governments, development banks, trade unions, leading companies, commercial banks and investors.
The lab set out four priorities in 2024: design and deploy financial instruments and strategies, establish effective metrics to measure performance, identify and achieve necessary policy reforms and stimulate breakthrough innovations and generate case studies.
It said incremental changes to ‘finance as usual’ practices will not be enough and that a transformation of the nearly $500 trillion global financial system is needed to bring the just transition to life.
The report said the transition will happen in particular places, each with their own specificities, and as a result the lab will explore how the four goals come together to deliver financial system transformation at the national and sub-national level.
The focus in 2024 will be on the UK and India.
Last Updated: 5 March 2024