Content thumbnail The Just Transition Planning Process for Business

The Just Transition Planning Process for Business

The Just Transition Planning Process for Business A Toolkit to Drive Social Dialogue and Stakeholder Engagement Toward a Just, Equitable and Inclusive Transition

Foreword Acknowledgments The following guidance was developed by development of this guidance, including Julie Dugard, Elisa Estrada Holteng, Eileen BSR, a sustainable business network and This guidance contains preliminary research, 昀椀ndings, consultancy focused on creating a world Gallagher, Cecilie Jørgensen, Sierra Leder, recommendations, and tools for just transition in which all people can thrive on a healthy and Laura Marie Hansson. planning. It aims to stimulate timely discussion planet. The perspectives expressed solely The authors also wish to thank all partners and critical feedback and to in昀氀uence ongoing for their insights and contributions to this discourse on the just transition. The content may re 昀氀ect the views of BSR and the authors, be revised as the context and topic develop and as and have been informed by insights guidance, including The B Team, Ceres, Council for Inclusive Capitalism, International company action on the just transition advances and and discussions fostered during the 昀椀rst stakeholder expectations evolve. year of the Energy for a Just Transition Labour Organization, International collaboration. Organisation of Employers, ITUC Just Energy for a Just Transition is a business- Transition Centre, World Benchmarking How to use this report led collaborative initiative facilitated by Alliance, and World Business Council for Sustainable Development. This report provides a 5-step process for developing BSR, in partnership with The B Team, a robust just transition plan, including: that brings companies and stakeholders orksheets to 昀椀ll in, that can further inform together to help energy, utilities, and Intended Audience W related companies to better plan for This guidance aims to provide an overall knowledge gathering, discussions and and implement a just, fair, and inclusive process for companies to begin thinking approaches. transition from a carbon-intensive economy about and developing their efforts on the Reference documents that provide high-level to a net-zero economy by 2050. just transition within their company and recommended actions as well as supporting BSR acknowledges the We Mean Business value chain at a corporate level. It is tailored resources and tools. Coalition and the Swedish International toward the energy and utilities sectors, Development Cooperation Agency (Sida) for although learnings could apply to other their generous support in the development sectors and company types. The guidance For more information or any questions on the Just of the Energy for a Just Transition is informed by insights from the Energy for Transition Planning Process, please contact BSR. collaborative initiative and this guidance. a Just Transition collaboration and BSR and This report was authored by Jenna The B Team’s engagement with companies. Kowalevsky, Anine Bundgård, Alexandra BSR and The B Team encourage companies Kolev, and Ouida Chichester. Additionally, across the energy and utilities sectors to the authors thank colleagues at BSR employ this process in their just transition and The B Team for their support in the planning efforts. BSR JUST TRANSITION PLANNING GUIDANCE

Table of Contents The Process of Just Transition Planning 10 Introduction 4 PHASE Deepen Understanding of the Just Transition Landscape 1 11 TOOL Stakeholder Engagement Guidance What Is a Just Transition? 4 Why Is a Just Transition Crucial for PHASE Examine Company Just Transition Context 22 the Energy and Utilities Sectors? 5 2 TOOL Document Review Checklist TOOL Indicators and Fundamental Actions What Is the Current State of Play on Just Assess Company Just Transition Transition for the Energy and Utilities Sectors? 6 PHASE Maturity and Identify Gaps 3 33 What Is Just Transition Planning? 7 TOOL Maturity Scale Why Is Just Transition Planning and PHASE Establish Company Governance Implementation Critical? 8 4 of Just Transition 37 TOOL Governance Guiding Questions PHASE Develop a Just Transition Plan 44 5 TOOL Just Transition Planning TOOL Key Elements of a Just Transition Plan Conclusion 56 BSR JUST TRANSITION PLANNING GUIDANCE

INTRODUCTIONINTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Introduction What Is a Just Transition? The concept of a just transition emerged in the 1980s by North American labor and environmental groups that recognized the need to support workers in industries that were being phased out and advocate 1 The concept for public policies that protect the natural environment. was further elaborated in the International Labour Organization (ILO) Guidelines for a Just Transition Towards Environmentally Sustainable Outcome 2 In 2015, the Paris Agreement, Economies and Societies for All. Inclusive green future that the international treaty on climate change, adopted the concept, maximizes economic and social recognizing that managing risks and opportunities generated by opportunities climate change and the transition to a net-zero economy on the 3 workforce and society at large will be essential. That same year, the ILO defined a “just transition” as “greening the economy in a way that is as Process fair and inclusive as possible to everyone concerned, creating decent Engagement and partnership work opportunities and leaving no one behind. A just transition involves maximizing the social and economic opportunities of climate action, with those who are most impacted while minimizing and carefully managing any challenges—including by the transition through effective social dialogue among all groups impacted, and 4 respect for fundamental labour principles and rights.” It is also high on the recent political agenda and is featured prominently in the 5 Expectations of company action are international outcome of COP27. rising rapidly, with investors in particular applying pressure on companies 6 to develop just transition plans. A just transition is both an outcome, which refers to an inclusive green future that maximizes economic and social opportunities for workers and communities throughout the energy transition, and a process through which there is engagement and partnership with those who are most impacted by the transition, namely workers and communities. BSR JUST TRANSITION PLANNING GUIDANCE 4

INTRODUCTIONINTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION affected people are essential to engage and involve in the decision- While the concept continues to increase in signi昀椀cance, there is a wide spectrum of interpretations. Workers, communities, governments, making processes and implementation of these efforts. This emphasizes businesses, and other stakeholder groups across geographies hold the criticality of robust social dialogue and stakeholder engagement as varying perspectives, and maintain different expectations, aims, and foundational to effective just transition planning. visions of a just transition. These groups de昀椀ne a just transition within the context of their own priorities, perspectives, and impacts, which Why Is a Just Transition Crucial for the Energy results in several distinct framings of the term as well as desired and Utilities Sectors? action. Nonetheless, a common understanding of a just transition is the need to integrate a stronger focus on the impacts on people, and The importance of a just transition for the energy and utilities sectors their human rights, as we move toward a net-zero economy, and that cannot be overstated. The sector’s collective ability to avoid the most catastrophic impacts of climate change depends on companies making drastic changes to their business models, in the case of those transitioning away from fossil fuels, and a dramatic shift toward a green Social Dialogue and Stakeholder Engagement economy, fueled by clean energy. This cannot be done without taking into account the impact these changes will have on people and society. This massive shift will not be possible without clear and decisive action from companies. If these changes are seen as causing significant While social dialogue and stakeholder engagement are often emphasized together as human impact, they will not succeed to the detriment of life on this an important foundation for just transition efforts, the two concepts have different planet. implications. According to the UN High Commissioner for Human Rights, stakeholder At the same time, companies cannot use the complexities of a just engagement is “an ongoing process of interaction and dialogue between an transition as an excuse for not transitioning. They must navigate the enterprise and its potentially affected stakeholders that enables the enterprise to challenges presented and adeptly manage the trade-offs at speed to hear, understand, and respond to their interests and concerns, including through avoid the most devastating impacts of climate change. collaborative approaches.”7 Social dialogue, however, refers to the process of Ensuring a just transition in the energy and utilities sectors and their negotiation, consultation, or sharing of information between, or among, workers and entire value chains is not just important for these sectors. Many other management (or trade unions and employers’ organizations), which is called bipartite sectors and society at large are greatly dependent on these companies negotiations. It can also include government representatives, in which case it is called getting the transition right. tripartite negotiations. Social dialogue processes can be informal or institutionalized and are often a combination of the two. The objective is to facilitate consultation and What is clear from BSR and The B Team’s work with the Energy for consensus building, and the negotiations generally lead to binding outcomes such as a Just Transition collaboration is that companies need a supportive 8 laws, regulations, collective bargaining agreements, or investment plans. environment in order to make these changes. They cannot do it alone. They need fit-for-purpose government policies and regulation and a shift in incentive structures that values and rewards climate mitigation, BSR JUST TRANSITION PLANNING GUIDANCE 5

INTRODUCTIONINTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION ecological restoration, and respect for human rights, as well as enables What Is the Current State of Play on Just more inclusive and equitable growth models. Many companies and their Transition for the Energy and Utilities Sectors? respective industry associations have long fought for policies that are counter to recognizing and addressing the climate crisis and ensuring a In 2021, as part of their work to assess and incentivize companies to just transition. This must stop. Companies need to support the creation contribute to transforming the energy system and decarbonizing the global economy, the World Benchmarking Alliance (WBA) conducted of a level playing 昀椀eld and governments need to establish an enabling policy environment. This is not just the right thing to do—society’s very its inaugural pilot Just Transition Assessment. WBA’s assessment, which existence may depend on it. covered 180 companies across three sectors (100 oil and gas companies, 50 electric utilities, and 30 automotive manufacturers), revealed key It is imperative that companies commit to net zero and ful昀椀ll climate common challenges for the energy and utilities sectors. It found that goals that are aligned with the Paris Agreement. Backsliding on climate the vast majority of high-emitting companies are failing to demonstrate commitments for the sake of short-term 昀椀nancial gains will have deep efforts toward a just transition, showing a striking and systemic lack of and lasting negative impacts. Now is the time to take concrete action action by companies to identify, prepare for, and mitigate the social to ensure the energy transition happens quickly and in a manner that is impacts of their net-zero strategies. Only nine of the 180 companies just, fair, and inclusive. Without a concrete plan and a commitment to assessed scored above 50 percent on their current performance across stay the course, this transition will not happen, and it certainly will not six just transition indicators. This puts an estimated 11 million workers be just. directly employed by these companies at risk of job and income loss and Given the importance of these sectors, energy, utilities, and related jeopardizes the ability to meet climate targets needed to avoid the worst companies are facing increasing pressure and expectations from impacts of climate change. external stakeholders to take more concrete climate action and ensure a just transition. While the external pressure increases, the energy Addressing social impacts as part of a just transition can require dif昀椀cult and utilities sectors are struggling to navigate how to best support trade-offs for energy and utilities companies trying to navigate the a just transition and its implications for workers, communities, other transition to a net-zero economy. For example, navigating concerns stakeholders, as well as society at large. related to the urgency and speed to reach net zero while simultaneously understanding the impacts on workers and other stakeholders, mitigating adverse impacts, and realizing opportunities can be challenging. This complicates internal processes, decision-making, and prioritization of just transition action, which poses signi昀椀cant challenges to formulating a just transition plan for companies. Companies need to consider the vast amount of resources required, both 昀椀nancial and human, and allocate adequate resources to support BSR JUST TRANSITION PLANNING GUIDANCE 6

INTRODUCTIONINTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION just transition efforts across the company and in the communities where put people at the heart of the energy transition and ensure that human they are present. Recognizing the challenging nature of this work for 9 rights are respected. energy and utilities companies, it is essential that companies address WBA, in partnership and consultation with 20 other organizations, these trade-offs, and that the commitment to advancing a just transition including the ILO and social partners, has developed a methodology is re昀氀ected in the choices companies make for the future. 10 to assess corporate efforts on the just transition. This methodology This guidance recommends steps to take to better understand the includes just transition planning and is seen as a robust framework implications of contributing to a just transition, how to navigate the to assess company action. The methodology, which includes six process of formulating a just transition plan, and associated actions that indicators for the assessment, comprises a clear framework for can be taken. companies to understand important elements and aspects that are relevant to a just transition. What Is Just Transition Planning? Just transition planning is one of the six indicators that WBA assesses Just transition planning for business is the company’s approach and when evaluating companies’ just transition efforts and disclosures. strategy to transition to a net-zero economy in a manner that is just and Speci昀椀cally, the just transition planning indicator emphasizes the following elements: human-centered. A just transition plan speci昀椀es a company’s priorities, as well as the ambition level across all aspects of the just transition in 1. Just transition planning is founded on company commitments to relation to its activities and business model. The plan also establishes respect human rights, protect and promote decent work, and address objectives, actions, and key performance indicators (KPIs) for just impacts on workers and communities resulting from the net-zero transition activities, and thereby how the company aims to contribute transition. to a just transition. Establishing an internal governance structure for 2. Social dialogue and stakeholder engagement, and more speci昀椀cally just transition and ensuring that senior leadership and the board how companies integrate this engagement in the development of are engaged from the beginning is essential to the process of just just transition planning. transition planning to secure resources and buy-in for developing and 3. KPIs or metrics, or speci昀椀cally “a set of time-bound, measurable implementing the plan. indicators to mitigate the social impacts of the low-carbon Comprehensive social dialogue and stakeholder engagement will 11 on workers, other affected stakeholders, and the transition” enhance understanding of the perspectives and priorities of workers, company’s business relationships. their unions and representatives, affected communities, local and 4. Governance and that “responsibility for the just transition should national governments, and other stakeholders that are foundational to lie at the highest level of decision-making within the company the process of designing a just transition plan. Engaging these groups structure (e.g., at board level), and the individual or committee with is critically important to properly consider the challenges that arise 12 from immense transformation and necessary to co-create solutions that responsibility for it should have expertise on just transition issues.” BSR JUST TRANSITION PLANNING GUIDANCE 7

INTRODUCTIONINTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Climate Action 100+ (CA100+), the world’s largest investor Just transition planning, and the subsequent implementation of the engagement initiative on climate, has developed the Climate plan, is an important part of preparing companies for the future, 13 Action 100+ Net Zero Company Benchmark, which de昀椀nes 11 key including impacts on the current workforce, understanding new skills indicators of success for business alignment with a net-zero emissions needed to meet emissions goals and the potential for workforce future and goals of the Paris Agreement. Just transition is one of conversion, ensuring access to skilled labor, and respecting the human these indicators, signaling its signi昀椀cance on the investor engagement rights of workers and other affected groups including communities. agenda. Benchmark assessments are used to inform signatory Establishing and/or maintaining stakeholder and public trust as well as decision-making on engagement strategies and help assess alignment maintaining a social license to operate remain imperative. between a company’s stated decarbonization ambitions and their planned or actual decarbonization investments and activities. While a just transition has signi昀椀cant bene昀椀ts for society, just transition The CA100+ just transition indicator, developed in consultation with planning and implementing a just transition plan also bene昀椀ts global topic experts and investors, emphasizes: companies in the following ways: • Enhances long-term resilience of the company’s workforce and value • A commitment to just transition principles. chain. • Just transition planning and progress tracking. 14 • Creates green jobs, which can enhance social license to operate WBA and CA100+ have con昀椀rmed that these just transition benchmarks and improve relationships with local governments. are complementary and aligned. • Allows for better determination of investments in education and re- and up-skilling of workers, or of local communities more broadly, to 15 Why Is Just Transition Planning and mitigate the risk of skills shortage and ensure business continuity Implementation Critical? and competitiveness. • Mitigates operational risks by enhancing workforce relations and With the need for a just transition increasingly gaining global planning through social dialogue and respect for labor rights. recognition, just transition planning is now becoming critical to ensuring • Balances and clari昀椀es risks and opportunities, which can enable the social dimension of the transition is given suf昀椀cient attention. In executive buy-in and align leadership and company activities. fact, effective management of the social implications of climate change • Strengthens workforce relations that contribute to improved and climate solutions, and achievement of a just transition, helps 16. to accelerate climate action and ensures an inclusive and equitable retention and recruitment and promotes innovation approach to developing and implementing solutions for workers and • Promotes cross-company alignment and direction around long-term communities. goals, offers clarity in the form of concrete plans to achieve them, and increases ownership across the company. BSR JUST TRANSITION PLANNING GUIDANCE 8

INTRODUCTIONINTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION • Reduces the risk of labor law violations and related litigation costs as well as the reputational risks associated with job dislocation and restructuring. • Addresses increasing expectations from stakeholders to support a transition that is just, equitable, and inclusive. • Increases access to financing and equity capital, and aligns with investor expectations around long-term strategic planning, social impact, and sustainability.17 Actors such as WBA and CA100+ are increasingly seeking to publicly benchmark companies’ efforts, performance, and disclosure on just transition and leverage these outcomes to transform companies’ behaviors and practices. These efforts also help investors to evaluate company ambition and progress toward net zero, with the goal of mitigating disruption to the economy and protecting long-term value for shareholders. The rise of assessment tools on the topic of just transition re昀氀ects transforming stakeholder expectations and a growing need for measurable and comparable metrics. Benchmarking aims to generate a “race to the top” to motivate systemic business action. At the same time, it holds less ambitious companies accountable by subjecting them to reputational risk if they fail to meet stakeholder expectations. “The responsible management of workforce and community dimensions of climate change are increasingly material drivers for value creation.” — UN PRI’s statement of investor commitment to support a just transition on climate change BSR JUST TRANSITION PLANNING GUIDANCE 9

INTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSIONCONCLUSION The Process of Just Transition Planning The process of just transition planning at the corporate level for the energy and utilities sectors includes 昀椀ve phases: PHASE PHASE PHASE PHASE PHASE 1 2 3 4 5 Deepen understanding Examine company just Assess company just Establish company Develop a just of the just transition transition context transition maturity governance of just transition plan landscape and identify gaps transition Each phase is described in further detail, including the purpose of the This process is focused on just transition planning phase, an overview of what it entails, and recommended activities. at the corporate level for energy, utilities, and Supporting tools and resources related to the recommended activities related companies. However, recognizing that a just are also incorporated throughout the guidance. While the phases are presented in sequential order, the just transition planning process is transition is heavily place-based, the process can be not typically linear because activities often occur in parallel or continue adapted to form the basis for localized just transition to evolve, particularly those in Phases 1, 2, and 3, which may overlap, planning and support implementation on the ground as well as those in Phases 4 and 5 because they are closely linked. for companies in almost any industry. Therefore, an iterative process is recommended whereby developments in one phase impact or lead to changes in an earlier or later phase. BSR JUST TRANSITION PLANNING GUIDANCE 10

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Purpose Explore and understand the current landscape and most pertinent issues related to just transition, including what workers and other stakeholders, PHASE both internal and external, are expecting and what peers are doing. Recommended activities in this phase 1 Conduct landscape scanning Engage with experts and peers Research and assess what just transition Engage with topical experts, academic means for the sector, identify key just institutions, regional experts, civil society transition focus areas where the sector and organizations, or peers to better understand the company can be most impactful, and the just transition, speci昀椀c impacts, explore peers’ commitments and actions on challenges and/or opportunities, as well the just transition. as other actors’ experiences in trying to Identify key stakeholders identify and address impacts on workers Deepen Understanding and/or communities related to the net-zero Identify and map key stakeholders (including transition. of the Just Transition workers, communities, and governments) that Identify emerging just transition risks and are impacted by the net-zero transition and opportunities climate action plans as well as those who are Landscape engaged in efforts to foster a just transition. Identify just transition risks and opportunities Use the Stakeholder Engagement Guidance that might surface in the future by assessing Tool to help map stakeholders. the social impacts of the company’s Understand stakeholder impacts and climate and business strategies and future expectations investments or trends, taking into account the energy sector, particular geographies, Engage stakeholders and facilitate social and the relevant national contexts. Map these dialogue to understand the expectations risks and opportunities in a manner that is from stakeholders, including workers, relevant to the company’s business model, unions, communities, investors, etc., to such as by business unit, function, and/or help determine just transition priorities and region/country of operation. ambitions. BSR JUST TRANSITION PLANNING GUIDANCE 11

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder 1. Identify Key Just Transition Engagement Stakeholders Guidance A thoughtful and detailed identi昀椀cation of affected stakeholders It is essential for companies to engage in social dialogue and is essential to understanding the full picture of the global just stakeholder engagement on just transition with a variety of transition context as well as local impacts. Meaningful, open, stakeholders. This guidance aims to help companies: and transparent social dialogue and stakeholder engagement » Identify key just transition stakeholder categories ensures the inclusion of impacted, marginalized, and vulnerable groups. Outreach to workers, their representatives and/or unions, local communities that might be impacted, as well as » De昀椀ne the engagement objective(s) and focus for engaging with governments is fundamental to identifying relevant stakeholders. different stakeholders Stakeholders should be identi昀椀ed at both the global and local » Determine relevant engagement approaches levels, particularly in key geographies, with the involvement of departments/individuals who have existing relationships with stakeholders and responsibilities for the relevant topics. It is also critical to consider key business relationships including suppliers, partners, and customers. De昀椀nition of “Stakeholders” According to the Organisation for Economic Co-operation and Development (OECD), stakeholders are “persons or groups who have interests that are or could be impacted 18 A stakeholder is someone who a昀昀ects or is a昀昀ected by an enterprise’s activities.” by a company’s operations, activities, products, or services, and can be either inside The following pages include questions that are or outside the company. Common stakeholders include employees, rightsholders, trade unions, civil society organizations, policymakers, regulators, suppliers, business examples to guide stakeholder identi昀椀cation. partners, investors, consumers, and the communities impacted by operations. Phase 1: Gather your team and engage in a transparent social discussion around stakeholder identi昀椀cation and BSR JUST TRANSITION PLANNING GUIDANCE future planning. 12

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: Identify Key Just Transition Stakeholders Which stakeholders are or might be impacted by the company’s climate strategies and plans in the future? 1. Which jobs will be phased out? Which jobs will be 5. What types of business activities/operations or assets created? will be needed/no longer needed and who are the people who build, operate, and close those activities/ operations or assets? 2. What kind of stakeholders would be impacted if workers aredislocated in the future? 6. Which communities or groups other than the workforce will be most impacted, and how? 3. What skills are needed/no longer needed? Which skills could be transitioned to be relevant for future plans? 7. Which suppliers and businesses will be impacted? 4. What geographic locations will become more/less 8. Which customers/consumers will be impacted? essential to the company? Who are the people that occupy those lands or hold the skills that exist in those locations, and what will their future look like? BSR JUST TRANSITION PLANNING GUIDANCE 13

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: Identify Key Just Transition Stakeholders Which stakeholders are engaged in the just transition agenda? 1. What unions/organizations represent workers at the 5. Who has a voice/who is not represented? company as well as in the supply chain at the global and local level? What is their focus? 6. What groups are advocating on matters related to a 2. What other organizations or individuals represent just transition at the local, national, and global level? affected stakeholders in these communities? 7. What academic institutions or organizations have relevant expertise or capabilities to identify, assess, or 3. How are national and local governments addressing address just transition impacts? the transition and who leads these discussions or efforts? 8. How are internal company stakeholders engaged at a 4. Which organizations or individuals represent corporate, country, and local level? vulnerable populations in these communities? BSR JUST TRANSITION PLANNING GUIDANCE 14

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: Identify Key Just Transition Stakeholders What will current or future climate strategies mean for What are the impacts on stakeholders from the company’s local communities, including social protection, health, climate strategy? schooling, environment, etc.? Which community groups or representatives are What would be the impact of not enacting the strategy? relevant to engage with on these matters? Refer to the list of stakeholder types to conduct a comprehensive analysis. BSR JUST TRANSITION PLANNING GUIDANCE 15

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: Identify Key Just Transition Stakeholders What are the stakeholders’ priorities or main By what process will those priorities or concerns be concerns related to just transition? accounted for in decision-making by the company? BSR JUST TRANSITION PLANNING GUIDANCE 16

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION 2. De昀椀ne Engagement Focus and Objectives A key priority for the company across all stakeholder categories is to map how the transition to a net-zero economy This tool provides an overview of suggested will impact them and determine how best to support them stakeholder engagement objectives and relevant through this transition. Stakeholders have differing (and in topics on which to focus. some cases opposing) views and understandings of a just transition. To identify more precise topics to discuss with each stakeholder on an ongoing basis, it is recommended that the company foster an open and transparent engagement approach to understand stakeholders’ perspectives and priorities on just transition as well as any concerns they have. Moreover, identifying the objectives for engaging and negotiating with speci昀椀c stakeholder groups—and the focus for discussion with each group—will help the company prepare for a just transition as well as secure and allocate resources accordingly. BSR JUST TRANSITION PLANNING GUIDANCE 17

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: De昀椀ne Engagement Focus and Objectives STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Workforce and Ensure workers are actively informed and involved in just • Social dialogue and negotiations with workers unions transition plans from an early stage; that negotiations occur; and • Re- or up-skilling that workers bene昀椀t from training and skills development, have • Working conditions access to decent and quality jobs, and have social protection • Social protection for workers19 during the transition “out.” • Talent development, retention, and inclusion • Labor rights and human rights STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Communities Strengthen communities’ resilience to the net-zero transition • Access to essential services (energy, mobility, health, education) by addressing economic, environmental, and social impacts • Resettlement and displacement on communities as a result of the company’s actions. Maintain • Social protection and economic diversi昀椀cation for communities transparent and inclusive dialogue and include communities in decision-making processes. • Land and environmental protection • Human rights • Impacts on local businesses STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Civil society Support organizations and groups that represent individuals • Local development initiatives organizations or communities that are most exposed to the negative • Land/environmental protection consequences of the transition to a net-zero economy. Maintain • Reconversion of territories transparent and inclusive dialogue and include civil society organizations in decision-making processes. • Protection of human rights defenders BSR JUST TRANSITION PLANNING GUIDANCE 18

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: De昀椀ne Engagement Focus and Objectives STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Regulators and Support policy design promoting just transition actions at • Policy frameworks that enable a just transition public authorities the local and/or national level, advocate to include affected • Job creation communities in policy-making processes, and drive job • Re- or up-skilling creation and decent work, including for vulnerable workers and communities. • Social protection for workers and communities STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Supply chain (and Support and partner with suppliers and business partners in • Adaptation of the supply chain to a net-zero economy other business the net-zero transition and in understanding and meeting high • Rights to freedom, quality working and living conditions, and a partners) standards on labor rights, human rights, and sustainability healthy environment across the supply chain. Understand and seek to mitigate • Social protection for workers impacts on workers in the supply chain and business partners related to transitioning out. • Job creation and re- or up-skilling • Stimulation of new ideas to develop a sustainable supply chain STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Customers Engage customers on the just transition and understand how • Access to energy to best support customers impacted by the transition to a net- • Energy ef昀椀ciency innovation zero economy. • Product affordability • Transparent communication on sustainability of products BSR JUST TRANSITION PLANNING GUIDANCE 19

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Stakeholder Engagement Guidance: De昀椀ne Engagement Focus and Objectives STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Investors Understand ambitions, goals, as well as methodologies and • Financial support indicators employed by investors for integrating a just transition • Awareness of bene昀椀ts and costs associated with just transition Corporate level within 昀椀nancing and investment strategies. efforts STAKEHOLDER OBJECTIVE FOCUS OF ENGAGEMENT Industry Collaborate with other companies or industry associations • Advocacy on policy to solve common challenges and advocate for policies and • Developing collaborative sectoral plans Corporate level regulation that support a just transition. • Applying collective leverage on partners in the value chain • Sharing best practices and solution identi昀椀cation for shared challenges in the industry BSR JUST TRANSITION PLANNING GUIDANCE 20

INTRODUCTION PROCESS PHASEPHASE 1 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION 3. Select Relevant Approaches It is advised that all relevant stakeholders are engaged. However, the stakeholder group and pertinence will Meaningful Stakeholder Engagement determine the appropriate engagement approach and frequency of engagement. Following the identi昀椀cation According to the OECD, meaningful stakeholder engagement is characterized of the objectives and focus of engagement for different by “ongoing engagement with stakeholders that is two-way, conducted in stakeholder groups, consideration can be given to the relevant good faith and responsive,”20 emphasizing the free expression of opinions and engagement approach and how the company ensures the perspectives to reach mutual understanding; some shared decision-making input of stakeholders is considered. Companies should also and engagement in activities; the genuine intention to listen and learn and evaluate the amount of resources, time, and capacity those act accordingly; follow-through on outcomes and actions to address adverse responsible for stakeholder engagement within the company impacts; and that stakeholder engagement is continuous. have to ensure there is adequate support to implement the engagement approaches. Where appropriate, opportunities should be sought to integrate engagement on a just transition with other stakeholder engagement activities. Refer to BSR’s FAQ on Stakeholder Engagement and Five- Step Approach to Stakeholder Engagement for additional guidance, key de昀椀nitions, and best practices for stakeholder engagement. BSR JUST TRANSITION PLANNING GUIDANCE 21

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Purpose To understand the company just transition context, including commitments, actions, and progress to date, as well as the most important just transition issues for the PHASE company to address, through engaging internal stakeholders as well as building awareness of the just transition. 2 Recommended activities in this phase Map just transition impacts Review the company’s climate and human Draw on the stakeholder engagement and rights commitments and broader sustainability social dialogue from Phase 1 and the Indicators strategy to understand the context for listed in the Just Transition Indicators and just transition integration. See suggested Fundamental Actions Tool to map the documents to review in the Document Review company’s current and emerging just transition Checklist Tool. impacts (i.e., the human rights and social Understand current efforts that are impacts associated with the company’s climate relevant to the just transition Examine Company transition plan, at the corporate level as well Facilitate conversations across the company as at the local level). Identify where they to understand and discuss current company Just Transition Context are showing up, including which business initiatives and activities that relate to or can lines and functions are associated with and/ be expanded to encompass a just transition or responsible for managing risks related to focus. Use Fundamental Actions listed in the negative social impacts as part of implementing Just Transition Indicators and Fundamental the company’s climate strategies, and which Actions Tool as a starting point to identify business lines and functions have the strongest all efforts. levers for just transition integration and Facilitate internal just transition knowledge implementation. This will inform governance building discussions in Phase 4. Review existing commitments Support awareness building and provide training for internal stakeholders tailored to Conduct a document review to identify their needs to establish a foundation for just commitments, expectations, standards, and/ transition discussions around impacts, risks or requirements that the company already has and opportunities, and the most important just in place, which are relevant to a just transition. transition issues for the company to address. BSR JUST TRANSITION PLANNING GUIDANCE 22

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Codes of Conduct Human Rights, Social Document Review Checklist Performance, and Code of conduct Communities As part of understanding the company’s current Supplier code of Community and social position and commitments related to just transition, conduct performance policies/ it is bene昀椀cial to assess existing practices by looking standards/guidance through existing documents to understand where just Climate Community report(s) transition elements might already be addressed or are relevant to integrate. Climate strategy, action Existing stakeholder lists plan(s) or mapping Climate report(s) Human rights commitments and policy Human Resources Human rights report(s) Stakeholder Equity, inclusion, engagement policy diversity, and/or social justice policies Other Employment/labor policies/standards/ Annual reports guidelines Company values Labor relations or Closure standards/ engagement policies/ guidance guidelines Health, safety, and environment policies/ standards/guidance Sustainability reports BSR JUST TRANSITION PLANNING GUIDANCE 23

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions Understanding what a just transition means in the context of business can be challenging, because there are many different elements. The following table builds on the just transition methodology developed by WBA and outlines just transition indicators and the key fundamental actions for each indicator, to provide a better understanding of what a just transition means in terms of concrete action items and focus areas. The indicators and related actions can be leveraged to identify and understand the just transition context, the most important just transition issues for the company to address and which functions, teams, or individuals are responsible, as well as to map current company initiatives and activities. This tool can be utilized to determine responsibility for the different just transition indicators and/or fundamental actions, and to create an overview of what has already been done by the company as well as where to 昀椀nd it. BSR JUST TRANSITION PLANNING GUIDANCE 24

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Commitment to 1. Develop a public commitment to a just transition that is integrated with a Just Transition the company’s climate strategy and aligned with international standards and frameworks, such as the ILO guidelines for a just transition toward environmentally sustainable economies and societies for all and the UN Guiding Principles on Business and Human Rights. 2. Integrate the just transition commitment into corporate strategy and policies, as well as into relevant disclosures and communications across the company, including climate transition plans. BSR JUST TRANSITION PLANNING GUIDANCE 25

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Social dialogue 1. Commit to social dialogue with workers and unions, including and stakeholder negotiations. engagement 2. Commit to meaningful engagement with affected stakeholders. 3. Engage in early, open, and continuous social dialogue and meaningful engagement with affected stakeholders on the just transition, including on risks, opportunities, impacts, and solutions. 4. Identify and disclose the different categories of key stakeholders to engage or that have been engaged on the just transition (including workers, communities, local NGOs, local government, etc.). BSR JUST TRANSITION PLANNING GUIDANCE 26

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Just transition 1. Develop a net-zero transition plan that respects human rights (including labor planning rights), builds on social dialogue and stakeholder engagement, involves ultimate board and senior-level approval, and delineates clear roles and actions for all business units and functions. 2. Ensure that the net-zero transition plan is timebound and has measurable indicators. 3. Disclose progress on meeting KPIs and living up to just transition commitments. BSR JUST TRANSITION PLANNING GUIDANCE 27

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Just Transition Indicators and Fundamental Actions TOOL Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Creating and 1. Commit to and take appropriate action to create and support access supporting to green and decent jobs in a way access to green that ensures respect for human rights, gender balance, and inclusion of and decent jobs vulnerable groups. 2. Assess and disclose risks of employment dislocation where relevant. BSR JUST TRANSITION PLANNING GUIDANCE 28

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Just Transition Indicators and Fundamental Actions TOOL Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Retaining and 1. Commit to and take appropriate action to re- and/or up-skill workers re- and/or displaced by the transition to a net- up-skilling zero economy in a way that ensures gender balance and inclusion of vulnerable groups. 2. Engage with unions, workers, and communities to identify skill-gaps and opportunities. BSR JUST TRANSITION PLANNING GUIDANCE 29

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Just Transition Indicators and Fundamental Actions TOOL Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Social protection 1. Determine how the impacts of the net-zero transition on social protection and social impact for workers and affected stakeholders management are identi昀椀ed. 2. Contribute to social protection in contexts of operation where stakeholders—including external stakeholders—are impacted by the net-zero transition. 3. Encourage business partners to contribute to social protection. BSR JUST TRANSITION PLANNING GUIDANCE 30

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION Just Transition Indicators and Fundamental Actions TOOL Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Advocacy for 1. Advocate for policies and regulation for green and decent job creation; policies and retention, education, and reskilling; regulation human and labor rights; and social protection, including for external affected stakeholders. 2. Include voices of those most affected in advocacy efforts. 3. Ensure there is no lobbying by any part of the company for policies or activities that are misaligned with achieving a just transition. BSR JUST TRANSITION PLANNING GUIDANCE 31

INTRODUCTION PROCESS PHASE 1 PHASEPHASE 2 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions Just Transition Fundamental Which individual/department What has been done? Indicator Actions is currently responsible for Where can it be found? the action? Who else should be involved? Implement clear policies for In昀氀uence and engaging with business partners on support just a just transition. This could involve transition commitment to business partner capacity-building on just transition, approaches for collaborating with business partners to help integrate just transition elements, business partners or in昀氀uencing business partners through requirements of just transition practices integration. Source: The list of just transition elements draws heavily on and expands on the World Benchmarking Alliance’s 21 just transition indicators for assessment of corporate efforts. BSR JUST TRANSITION PLANNING GUIDANCE 32

INTRODUCTION PROCESS PHASE 1 PHASE 2 PHASEPHASE 3 3 PHASE 4 PHASE 5 CONCLUSION Purpose To assess the current maturity of the company on just transition, understand risk and opportunities across the company’s operations, and identify performance gaps that PHASE need to be addressed. This will inform just transition priorities, action needed, as well as the future just transition plan. 3 Recommended activities in this phase Conduct a just transition maturity Understand just transition risks and assessment of the company opportunities Review and assess current action and Evaluate what risks and opportunities initiatives across just transition indicators to the company might face related to a understand the company’s maturity level on just transition. This could be related to just transition. Draw on current commitments, reputational risks, investor requirements, Assess Company policies, standards, action plans, as well partnership and stakeholder engagement as 昀椀ndings from interviews with internal opportunities, workforce retention, worker stakeholders across the company. As part of displacement, future skills that are currently Just Transition Maturity the maturity assessment, document initial unavailable, opportunities to create green gaps that may be identi昀椀ed to address these and decent jobs, community disruption, etc. and Identify Gaps gaps in Phase 5 when developing the just transition plan. BSR JUST TRANSITION PLANNING GUIDANCE 33

INTRODUCTION PROCESS PHASE 1 PHASE 2 PHASEPHASE 3 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Maturity Commitment to Commitment to respecting Scale climate action human rights Fundamental to any just transition action and » Set short- and long-term » Make a public commitment to planning should be a commitment to climate action, science-based targets aligned respect human rights underpinned by the goals of the Paris Agreement, with meeting net-zero emissions and a commitment to respecting human rights aligned by 2050 » Conduct ongoing human rights with the UNGPs. These commitments should be public, due diligence and action to support the commitments » Draft a climate transition plan should include: » Provide individuals who may have their rights violated with remedy Building on these fundamental commitments and actions, companies can use the following scale to evaluate their maturity on just transition. The maturity scale builds on the Just Transition Indicators and Fundamental Actions Tool from Phase 2 to expand on what just transition maturity looks like across the just transition indicators. It is based on current guidance and is likely to evolve and be enhanced over time. The maturity scale can facilitate the assessment of the company’s just transition approach, actions, and maturity across eight different indicators, helping to understand how advanced the company is across the just transition, and what is needed to increase maturity. BSR JUST TRANSITION PLANNING GUIDANCE 34

INTRODUCTION PROCESS PHASE 1 PHASE 2 PHASEPHASE 3 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions AD HOC NASCENT ESTABLISHED INTEGRATED Commitment The company does not directly The company mentions a just The company has a public commitment to a just The company has a public commitment to a just to a just mention a just transition in climate transition but does not demonstrate a transition and relates just transition to relevant transition, which is aligned with international transition commitments but mentions some just formal approach to it. aspects of the business, demonstrating a clear standards and frameworks such as the ILO transition components (such as social understanding of priority just transition issues guidelines. The commitment is consistently dialogue or stakeholder engagement) to be addressed and how they relate to the integrated into corporate strategy, policies, and with little or no connection to the company. program areas. business. Social The company has not identi昀椀ed The company commits to social The company commits to social dialogue as it The company commits to social dialogue, dialogue and stakeholders that are speci昀椀cally dialogue as it relates to elements of relates to elements of a just transition. discloses the categories of stakeholders affected by the transition, but it a just transition. it engages with on just transition, and stakeholder engages stakeholders including The company identi昀椀es relevant stakeholders, demonstrates ongoing social dialogue engagement workers, local communities, and The company identi昀椀es relevant is involved in social dialogue, and engages and meaningful engagement with affected unions on other issues that are related stakeholders affected by the stakeholders in a meaningful way on some just stakeholders on all aspects of just transition. to a just transition. transition but has little social transition elements. dialogue and minimal engagement The company is transparent on how input from with stakeholders on just transition stakeholders is considered in decision-making. elements. TORJust The company has a decarbonization The company has a decarbonization The company has a decarbonization strategy, The company demonstrates net-zero transition transition strategy, with little to no evidence of strategy and has mapped out which integrates considerations of social planning, which aligns with international INDICAplanning social impacts and engagement with associated social impacts and/or implications and affected human rights and sets human rights standards, has timebound, affected stakeholders. has engaged with some affected out objectives for a just transition. The company measurable indicators for a just transition, stakeholders on how the company has engaged with some affected stakeholders to involves board awareness and senior-level plans to address these. inform these objectives. engagement, and is informed by and builds on There is senior-level awareness of just transition social dialogue and stakeholder engagement. planning and the company has formulated KPIs on just transition elements. Creating and The company loosely mentions an The company has an ambition to The company is committed to, and looks for The company is committed to and takes supporting ambition to create and support, as create and support, as well as retain, opportunities for, retaining and creating or appropriate action to create or support access access well as retain, green and decent jobs. green and decent jobs. The company supporting access to green and decent jobs. to green and decent jobs in a way that ensures to green and The company has not identi昀椀ed or acknowledges the risk of dislocating The company assesses and discloses risks of gender balance and inclusion of vulnerable disclosed the risk of dislocation due to workers as a part of the transition employment dislocation where relevant. groups. The company assesses and discloses decent jobs the transition to a net-zero economy in to a net-zero economy and assesses risks of employment dislocation where relevant. a way that relates to the company or and discloses where this might be its industry. relevant for workers in the company or value chain. BSR JUST TRANSITION PLANNING GUIDANCE 35

INTRODUCTION PROCESS PHASE 1 PHASE 2 PHASEPHASE 3 3 PHASE 4 PHASE 5 CONCLUSION TOOL Just Transition Indicators and Fundamental Actions AD HOC NASCENT ESTABLISHED INTEGRATED Retaining The company has not identi昀椀ed a The company has started to identify The company is committed to re- and/or up- The company is committed to and takes and re- and/ need to re- and/or up-skill workers a need to re- and/or up-skill workers skill workers displaced by the transition to appropriate action to re- and/or up-skill workers or up-skilling displaced by the transition to a net- displaced by the transition to a net- a net-zero economy and has a process for displaced by the transition to a net-zero zero economy or only refers to this on zero economy and is exploring how to identifying skills gaps for workers and affected economy in a way that ensures gender balance a very general level. do so. stakeholders that includes engagement with and inclusion of vulnerable groups, and that unions, communities, and governments. involves engagement with unions, communities, and governments to identify skill gaps and opportunities. Social The company has initiatives or The company has initiatives or The company demonstrates how it contributes The company describes how it identi昀椀es protection philanthropy to support surrounding philanthropy related to the net-zero to addressing the impacts of the net-zero the impacts of the net-zero transition on and social communities, although this is not transition that focuses on supporting transition on workers’ social protection and social protection for workers and affected impact necessarily related to the net-zero communities or other groups affected affected stakeholders in the contexts in which it stakeholders and contributes to social management transition or directed at affected by the transition to a net-zero operates. protection in the contexts in which it operates. stakeholders. economy. The company expects its business partners to contribute to social protection. Advocacy for The company does not disclose or The company does not disclose or The company demonstrates that it lobbies, The company actively lobbies for policies and policies and discloses limited information on its discloses limited information on its directly and/or through trade associations and/ regulation for green and decent job creation; regulation lobbying activities related to just lobbying activities related to just or employer organizations, for just transition retention, education, and reskilling; and social TOR transition, or there is no alignment transition, or there is no alignment policies and regulations that enable the protection aligned with stakeholder priorities. between the company’s business between the company’s business generation of green and decent jobs and the The company is transparent in its policy strategy, just transition commitments, strategy, just transition commitments, retention, education, and reskilling of workers positions and does not lobby for activities that INDICA and policy engagement, or the and policy engagement, or the and/or social protection of workers and are misaligned with a just transition. company actively and publicly company actively and publicly affected stakeholders at the local, national, advocates for policies that contradict a advocates for policies that contradict and/or international level. just transition in some cases. a just transition in some cases. The company discloses any misalignment of its The company is not transparent lobbying activities with policies and regulation about any potential misalignment of that support a just transition and discloses the its lobbying activities with policies measures it takes to address this. and regulation that support the just transition. The company recognizes the need The company has engaged with some The company is committed to supporting The company has implemented clear processes In昀氀uence to engage with business partners business partners on just transition, business partners to understand just transition for engaging with business partners on the and support on just transition, but it has not yet but it is not standard process to and how this might affect their stakeholders just transition. These processes might relate to on just done so. engage on this topic and tries to in昀氀uence business partners to sharing knowledge and best practices, business transition engage in just transition efforts. partner capability building on just transition, approaches collaborating with business partners to help for business partners integrate just transition elements, or in昀氀uencing business partners through requirements of just transition integration. 22 BSR JUST TRANSITION PLANNING GUIDANCE Source: The maturity scale draws from and expands on the World Benchmarking Alliance’s just transition indicators for assessment of corporate efforts. 36

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION Purpose To effectively implement, progress, and respond to stakeholder expectations, it is essential to establish a clear governance structure for just transition efforts within the PHASE company. Building an effective and well-integrated governance structure will enable ownership, accountability, and integration throughout the business. 4 Recommended activities in this phase Determine a governance structure for just Consider establishing a just transition transition working group Establish clear ownership of and responsibility Explore creating a cross-functional working for a just transition by de昀椀ning roles and group that includes representatives from responsibilities at various levels and across different functions and business units functions. Provide alignment and clarity to relevant to just transition, including Climate/ those executing the work and enable effective Sustainability, Human Resources/Labor Establish Company communication between the various teams Relations, Social Performance/Stakeholder Governance of involved. Engagement, Contracting & Procurement/ Supply Chain, Tax/Finance, Government Just Transition Relations, Strategy, Legal, and Business/ In line with the World Economic Forum’s Principles for E昀昀ective Climate Governance, boards have a duty to shareholders to oversee e昀昀ective management of the transition, which might include providing direction and support to ensure that impacts, opportunities, and inequalities along the value chain are anticipated and managed. Boards are also responsible for helping shape the company’s strategic direction and long-term vision and enabling a just transition through stewardship, holding executives accountable, and ensuring appropriate resource allocation.23 BSR JUST TRANSITION PLANNING GUIDANCE 37

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION TOOL Operations, to ensure alignment on the company’s just transition Just Transition Governance approach and activities. Additionally, or alternatively, explore Guiding Questions establishing local working groups in key geographies, business lines, or operations where just transition is critical or presents signi昀椀cant To effectively implement, advance, and respond to stakeholder challenges, and establish mechanisms for integration and alignment expectations on a just transition, a clear and 昀椀t-for-purpose internal between locally-led activities and corporate-driven strategies and governance structure is necessary. Building an effective and well- approaches. integrated governance structure, which leverages existing structures and Ensure senior leadership oversight and board awareness processes where possible, will enable ownership, integration throughout Ensure the company’s cross-functional just transition efforts are the business, and the allocation of appropriate resources and expertise supported by senior leadership/top management and that adequate to address and invest in just transition activities and integration. There resources (including budget and staff time) are dedicated to carry out are several aspects of just transition planning that make implementing a the work in a meaningful manner. Ensure that the board is aware of the governance structure bene昀椀cial: elements of a just transition and considers them in decision-making. Understand internal staff expertise and capabilities: » Broad awareness and buy-in from across the entire company help to advance progress. As part of establishing a governance structure and de昀椀ning roles and responsibilities, assess current and relevant expertise in the individuals » Just transition planning requires collaboration, contributions, and and teams with just transition roles and assign responsibilities data from many functions and external stakeholders. accordingly. Identify and address gaps in expertise or capabilities on speci昀椀c just transition aspects. » Dif昀椀cult decisions, possibly including trade-offs, will need to be made. Consider establishing an external advisory committee Assemble a group, or join existing groups, of external stakeholders to » Stakeholder expectations for engagement and demonstrated serve as a strategic counsel and mechanism to advise on just transition progress are rapidly increasing. efforts. Ensure there are multiple perspectives in the group re昀氀ecting » Companies must be able to consolidate, measure, and communicate the diversity of interests of workers and stakeholders. progress. Building from the risks, opportunities, and impacts identi昀椀ed through Phases 2 and 3, the following pages can help guide internal governance discussions and consideration of different elements of just transition governance: BSR JUST TRANSITION PLANNING GUIDANCE 38

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION TOOL Just Transition Governance Guiding Questions ELEMENTS OF GOOD GOVERNANCE Board-level awareness GUIDING QUESTIONS 1. How does the company ensure board-level awareness 5. Are there lessons learned from other sustainability and buy-in of the just transition? initiatives that can be relevant to a just transition? 2. Is there an individual/committee responsible for just 6. What are the national and regional considerations transition at the board level? If so, do they have the for board (or executive) awareness, in particular necessary knowledge on just transition issues? legislative implications? 3. How might the just transition be relevant to existing 7. Does the board have exposure to the views of board committees, or how might those committees stakeholders on the just transition? be leveraged on just transition issues? 4. Does the board act as a lever to drive action and hold executives accountable for embedding the just transition plan into corporate strategy and action? BSR JUST TRANSITION PLANNING GUIDANCE 39

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION TOOL Just Transition Governance Guiding Questions ELEMENTS OF GOOD GOVERNANCE Executive oversight and leadership GUIDING QUESTIONS 1. To what extent does the executive team oversee 4. Does the individual(s) responsible for the just the company’s just transition approach, plan, and transition at the executive level have competence and activities? expertise on just transition issues? 2. Does responsibility for the just transition lie at the 5. How does the responsible executive ensure effective executive level? collaboration between relevant functions across existing company siloes? 3. Who is responsible for day-to-day approval or sign- off of activities and resources related to the just transition? BSR JUST TRANSITION PLANNING GUIDANCE 40

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION TOOL Just Transition Governance Guiding Questions ELEMENTS OF GOOD GOVERNANCE Clear roles and responsibilities GUIDING QUESTIONS 1. What are the most salient just transition risks, 3. How are responsibilities for just transition processes opportunities, and impacts of the company that were and actions assigned across departments, teams, or identi昀椀ed in Phase 2 and 3 and what department(s) or individuals? expertise area(s) are best equipped to address those issues? 2. Which departments/business units geographies have the most prominent levers or are most relevant for just transition implementation? BSR JUST TRANSITION PLANNING GUIDANCE 41

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION TOOL Just Transition Governance Guiding Questions ELEMENTS OF GOOD GOVERNANCE Dedicated staff GUIDING QUESTIONS 1. At present, is there a clear owner/accountable person 3. Does the company have an internal just transition for the company’s just transition efforts? How will that working group? If so, how is the group organized? person’s role evolve as just transition processes are Who is involved? What is their mandate? integrated across the company? 2. Is ownership of the just transition currently embedded across several departments or anchored in one department? Who decides where ownership and accountability are embedded? BSR JUST TRANSITION PLANNING GUIDANCE 42

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASEPHASE 4 4 PHASE 5 CONCLUSIONCONCLUSION TOOL Just Transition Governance Guiding Questions ELEMENTS OF GOOD GOVERNANCE External perspectives GUIDING QUESTIONS 1. What is the role of external stakeholders in 3. When and how often are external stakeholders governance of just transition efforts? or relevant experts engaged for input on the just transition? 2. How are stakeholders’ perspectives addressed and 4. What is the standard process for taking into account integrated into just transition efforts? stakeholder feedback in decision-making on the just transition? BSR JUST TRANSITION PLANNING GUIDANCE 43

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Purpose Based on the learnings and outcomes of the previous phases, this phase will develop an overarching corporate approach to a just transition, identify actions, and PHASE prioritize local implementation resulting in the development of a just transition plan. Ambition-setting will determine the level and needs of investment in resources and a timeline of action. Prioritizing key just transition issues will help focus and 5 systemize the company’s efforts and will inform the company’s overarching vision, objectives, and KPIs. This will enable bespoke local implementation based on the company’s overarching commitment to a just transition. Recommended activities in this phase Develop an overarching vision and level of Determine key just transition priorities to ambition on a just transition address, as well as the level of ambition across different elements Develop a Use existing models to understand possible approaches and outcomes and identify the Use the previous Just Transition Maturity Just Transition Plan company’s just transition ambition level. Scale Tool included in Phase 3 to identify the Include and consult relevant departments/ company’s level of ambition for each of the individuals in setting ambition levels and link just transition indicators and identify necessary the just transition ambition with the company’s action to reach the desired maturity level. sustainability and climate ambitions and Use the Just Transition Planning Tool to help strategies. identify gaps between current and desired In order for companies to consider and determine an overarching maturity, and to determine actions, priorities, vision and level of ambition for a just transition, as well as the and responsibility. outcome(s) they would like to contribute to, there are several existing resources that help outline approaches to the transition. The Just Transition Research Collaborative developed a continuum of four ideal- 24 typical approaches to a just transition, ranging from approaches that preserve the existing political economy to approaches that envision signi昀椀cantly di昀昀erent futures.25 BSR JUST TRANSITION PLANNING GUIDANCE 44

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION The Council for Inclusive Capitalism developed a Just Transition Framework 26 for Company Action that provides a comprehensive guide for governments, companies, and civic organizations to manage the transition to net-zero emissions in ways that are just, as well as an online learning platform that contains resources and company examples. The framework and platform can be useful to companies for setting just transition priorities and objectives in consideration of those identi昀椀ed through social dialogue and stakeholder engagement. Develop objectives and key performance indicators Use the Just Transition Maturity Scale Tool included in Phase 3 to The Council for Inclusive Capitalism has a public database develop just transition objectives and KPIs across the different 27 of commitments to action which align to its Just Transition just transition indicators that align with the company’s ambition-level Framework for Company Action, and maps to WBA and for each element. Integrate the KPIs in the Just Transition Planning CA100+ just transition methodology and indicators. below, linking the KPIs to identi昀椀ed actions, gaps, and prioritized Tool This resource can be used by companies to share their geographies or assets as relevant. Develop an approach to local implementation commitments and progress for others to learn from. Determine an approach to local implementation of the just transition plan, including developing a methodology for assessing and prioritizing geographies, lines of business, and/or assets based on impacts and opportunities related to the just transition. Develop a timeline for just transition action Draft a timeline to enable the company to address the gaps between the current just transition maturity and ambition-level. Create or update the company’s commitment to a just transition to re昀氀ect the new ambition and priorities Publish and broadly communicate the commitment both internally and externally. BSR JUST TRANSITION PLANNING GUIDANCE 45

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION TOOL Just Transition Planning The following tool outlines a process to plot a company’s current maturity level and determine the necessary actions to address gaps between the current and desired maturity levels. For each indicator, utilize the Just Transition Maturity Scale Tool from Phase 3 for examples of what different levels of ambition would mean in terms of practical action, and to understand the gap between the current and desired maturity levels. The tool and process should be completed collaboratively with colleagues across the company who would be responsible for the relevant indicator focus area or actions. BSR JUST TRANSITION PLANNING GUIDANCE 46

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL INDICATOR Maturity Scale Tool (Phase 3) Desired Commitment to Summarize the current maturity level position. What is the company doing to warrant the current a Just Transition 2 maturity level position? TOOL Indicators and Fundamental Actions (Phase 2) TOOL Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 47

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL INDICATOR Maturity Scale Tool (Phase 3) Desired Social dialogue Summarize the current maturity level position. What is the company doing to warrant the current and stakeholder 2 maturity level position? TOOL engagement Indicators and Fundamental Actions (Phase 2) TOOL Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 48

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL INDICATOR Maturity Scale Tool (Phase 3) Desired Just transition Summarize the current maturity level position. What is the company doing to warrant the current planning 2 maturity level position? TOOL Indicators and Fundamental Actions (Phase 2) TOOL Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 49

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL Maturity Scale Tool (Phase 3) Desired INDICATOR Summarize the current maturity level position. Creating and What is the company doing to warrant the current supporting 2 maturity level position? TOOL Indicators and Fundamental Actions (Phase 2) TOOL access to green Maturity Scale Tool (Phase 3) and decent jobs Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 50

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL INDICATOR Maturity Scale Tool (Phase 3) Desired Retaining and Summarize the current maturity level position. What is the company doing to warrant the current re- and/or 2 maturity level position? TOOL up-skilling Indicators and Fundamental Actions (Phase 2) TOOL Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 51

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL INDICATOR Maturity Scale Tool (Phase 3) Desired Social protection Summarize the current maturity level position. and social impact What is the company doing to warrant the current 2 maturity level position? TOOL management Indicators and Fundamental Actions (Phase 2) TOOL Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 52

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current INDICATOR 1 TOOL Maturity Scale Tool (Phase 3) Desired Advocacy for Summarize the current maturity level position. policies and What is the company doing to warrant the current 2 maturity level position? TOOL regulation Indicators and Fundamental Actions (Phase 2) TOOL Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 53

INTRODUCTIONINTRODUCTION PROCESSPROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSIONCONCLUSION Company response: TOOL Plot both the current and desired maturity Just Transition Planning levels of the company LEVEL AD HOC NASCENT ESTABLISHED INTEGRATED Current 1 TOOL INDICATOR Maturity Scale Tool (Phase 3) Desired Leverage and Summarize the current maturity level position. What is the company doing to warrant the current support on 2 maturity level position? TOOL just transition Indicators and Fundamental Actions (Phase 2) TOOL approaches for Maturity Scale Tool (Phase 3) Describe the commitments and activities necessary business partners 3 for the desired maturity level TOOL Maturity Scale Tool (Phase 3) 4 Identify the action(s) necessary to address the gaps between the current and desired maturity levels 5 Identify the priority level of the action(s) Describe which geographies 6 and/or assets should be prioritized for the identi昀椀ed actions (where relevant) Describe how performance/success will be 7 measured (identify objectives, outcomes, and/or KPIs to evaluate performance) 8 Identify which department/individual is responsible for the action(s) BSR JUST TRANSITION PLANNING GUIDANCE 54

INTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASEPHASE 5 5 CONCLUSION TOOL Key Elements of a Just Transition Plan To ensure a holistic approach to just transition efforts within the broader business and climate strategy, a just transition » Key performance indicators that are time-bound and plan can be integrated into—and disclosed through—a measurable as well as quantitative and/or qualitative company’s climate transition plan. The following key elements targets/goals providing a mechanism to measure the should be included in a robust just transition plan: implementation of the just transition plan and demonstrate progress » A commitment to a just transition, building on commitments » A description of how the company has developed the just to climate action and respecting human rights. transition plan, and how engagement with stakeholders more broadly, as well as social dialogue with worker » An overarching vision and level of ambition for a just representatives or unions, has informed and contributed to transition the process of developing the just transition plan. » Articulation of priority issues and objectives as they relate » A description of how the company intends to disclose its to affected stakeholders and the company. just transition commitments, plan, activities, and progress externally, as well as how it will communicate about the » A description of the methodology, process, or tool used just transition internally. for prioritizing assets, geographies, or speci昀椀c issues for just transition efforts. The just transition plan should be updated as the external » Planned actions and initiatives, including how these will context, stakeholder expectations and impacts, and company include affected stakeholders both at a corporate level activities, including the company’s climate transition plan, and for prioritized assets, geographies, and speci昀椀c issues. evolve and change. BSR JUST TRANSITION PLANNING GUIDANCE 55

INTRODUCTION PROCESS PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 CONCLUSIONCONCLUSION Conclusion While recognizing the complexities of contributing to an energy The process outlined in this guidance aims to lead to the development transition that is just, fair, and equitable, and the challenges associated of a just transition plan building on external stakeholder engagement with just transition planning, this guidance recommends a process and social dialogue, internal knowledge-gathering and discussions, a for companies in the energy and utilities sectors to develop a robust better understanding of how and what the company is already doing, just transition plan. This process is broken down into 昀椀ve phases for and a plan for company ambition, priorities, action, integration across companies to follow, each providing high-level recommended actions the company, and governance. The process and resulting plan are as well as supporting tools and resources. The 昀椀ve phases are: designed to inform implementation of just transition efforts, including a » Deepen understanding of the just transition landscape, including timeline for objectives to be met. conducting social dialogue and engaging stakeholders broadly to The process is underscored by the importance of meaningful and identify and understand the most affected stakeholders and the continuous stakeholder engagement and social dialogue to inform relevant just transition issues for the company to address. the just transition plan, evaluate the effectiveness of the plan, and » Examine company just transition context, including mapping the continuously re昀椀ne the plan as new insights are gained. company’s current and future just transition impacts and which This guidance aims to help companies establish a solid foundation departments/functions they are associated with, as well as existing for understanding what a just transition plan entails—for the planning commitments, efforts, or actions that relate to a just transition. » Assess company just transition maturity and identify gaps, including process as well as for implementation of the plan. The plan is the understanding how mature the company awareness, practices, and essential 昀椀rst step in companies’ just transition efforts, but once it is integration of just transition is across the range of indicator topics and developed, a signi昀椀cant investment of effort and resources are needed identifying associated gaps that require action to address. to implement the plan. » Establish company governance of just transition, including It is critical that companies recognize the importance of their role determining an internal governance structure with board awareness, and ful昀椀ll their responsibilities in advancing a transition to a net-zero senior leadership responsibility and oversight, and clear roles and economy that is just, inclusive, and equitable for all. responsibilities assigned to individuals from relevant departments across the company with suf昀椀cient expertise and capacity to take on the work. » Develop a just transition plan, building on the previous phases to develop an overarching vision and level of ambition, objectives, and priorities, corporate and local-level action plans, as well as KPIs that are measurable, time-bound, and contribute to developing a timeline for action. BSR JUST TRANSITION PLANNING GUIDANCE 56

7 United Nations Human Rights Of昀椀ce of the High 19 Including healthcare, income replacement bene昀椀ts in the Endnotes Commissioner (2012), “The Corporate Responsibility to case of sickness, old age, unemployment, work-related injury, Respect Human Rights—An Interpretive Guide.” disability, and maternity, child and family bene昀椀ts, and social 1 Just Transition Initiative (2023), “About Just Transitions.” 8 The International Labour Organization (n.d.), “Social assistance bene昀椀ts and services that guarantee basic income 2 International Labour Organization (2015), “Guidelines Dialogue.” security. The Just Transition Centre and The B Team (2018), for a just transition towards environmentally sustainable 9 World Benchmarking Alliance (2021), “World Benchmarking “Just Transition: A Business Guide.” economies and societies for all.” Alliance Just Transition Methodology.” 20 Organisation for Economic Co-operation and Development 3 Conference of the Parties (2015), “Paris Agreement under the 10 World Benchmarking Alliance (2021), “Just Transition (2017), “OECD Due Diligence Guidance for Meaningful United Nations Framework Convention on Climate Change.” Methodology.” Stakeholder Engagement in the Extractive Sector,” p. 18. 21 World Benchmarking Alliance (2021), “World Benchmarking 4 The complete ILO de昀椀nition states that “A just transition 11 World Benchmarking Alliance (2021), “World Benchmarking means greening the economy in a way that is as fair and Alliance Just Transition Methodology.” Alliance Just Transition Methodology.” inclusive as possible to everyone concerned, creating 22 World Benchmarking Alliance (2021), “World Benchmarking decent work opportunities, and leaving no one behind. A 12 World Benchmarking Alliance (2021), “Just Transition Alliance Just Transition Methodology.” just transition involves maximizing the social and economic Methodology.” opportunities of climate action, while minimizing and 13 Climate Action 100+ (2023), “Net Zero Company 23 World Economic Forum (2022), “The Chairperson’s Guide to carefully managing any challenges—including through Benchmark.” a Just Transition.” effective social dialogue among all groups impacted, and 14 The Just Transition Centre and The B Team (2018), “Just 24 United Nations Research Institute for Social Development (2018), “Mapping Just Transition(s) to a Low-Carbon World.” respect for fundamental labor principles and rights.” Transition: A Business Guide.” 5 The COP27 Sharm el-Sheikh Implementation Plan states 15 United Nations Global Compact (2022), “Introduction to 25 Alternatively, the Just Transition Initiative has also developed a model that focuses on level of ambition based that “… climate action should be implemented in a manner Just Transition—A Business Brief.” that is just and inclusive while minimizing negative social on two critical dimensions, impact and scope, using a matrix 16 UN Global Compact (2022), “Introduction to Just that ranges from Incremental Reform that is narrowly focused or economic impacts that may arise from climate action,” Transition.” and less inclusive to Systems Change that has a broad impact and the need for “meaningful and effective social dialogue and participation of all stakeholders.” The Sharm el-Sheikh 17 For example, 161 investors representing US$10.2 trillion in and is highly inclusive. Implementation Plan (Decision 1/CMA.4): Section VIII assets endorsed the 2020 Statement of Investor Commitment 26 Council for Inclusive Capitalism (2021), “Achieving a Just Implementation pathways to a just transition, paragraphs 50- to Support a Just Transition on Climate Change coordinated Energy Transition: A Framework for Company Action.” 53. by PRI. Climate Action 100+ (2022), “A need for robust just 27 Council for Inclusive Capitalism, “Actions for a Just 6 An example is a group of 161 investors representing transition planning.” Transition.” US$10.2 trillion in assets who endorsed the 2020 Statement 18 Organisation for Economic Co-operation and Development of Investor Commitment to Support a Just Transition on (2018), “OECD Due Diligence Guidance for Responsible Climate Change coordinated by Principles for Responsible Business Conduct.” Investment (PRI). BSR JUST TRANSITION PLANNING GUIDANCE 57

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