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