CSR Europe’s Leaders Group Outlines Next Steps to Finance a Just Transition
On June 16th, members and Knowledge Partners of the Leaders Group “Financing a Green and Just Transition” shared their inputs to promote data comparability & accountability and embed Just Transition plans into companies’ strategies and investment plans.
The outcome of this dialogue will be presented at the European SDG Summit’s high-level plenary on 12 October. Register now.
Investing in Just Transition plans requires stakeholders to broaden up the horizon and connect the dots between the Environmental, Social and Governance (ESG) pillars of sustainable investing. However, this process can turn into a daunting exercise for companies and investors alike due to the lack of data comparability and accountability. For this reason, at the second focus group meeting of the Markets Leaders Group “Financing a Green and Just Transition”, participants addressed the critical challenge posed by sustainability metrics and standards inconsistencies.
The group identified four areas of action to tackle the fragmentation and limited comparability of the information disclosed by companies on their Just Transition performance:
Context analysis
Just Transition plans require internal awareness and knowledge of all the ESG dimensions.
Focus on double materiality
Companies and rating agencies should leave behind a one-sided approach focused on financial risks and opportunities in favour of a comprehensive assessment of ESG factors impacting on the business.
Standardisation of available tools
Instead of “reinventing the wheel”, stakeholders’ efforts should focus on capitalising on existing tools, developing common criteria, adopting a common language, facilitating guidance on how to use tools in practice.
Active role of policymakers
While double materiality is now at the core of the European Sustainability Reporting Standards, some elements, like the rebuttable presumption and the risk-based approach for supply chain impact assessment, need further clarification. Accompanying information is needed to support companies in their implementation.
NEXT STEPS
The Markets Leaders Group will meet again on September 14th to define the recommendations to European policymakers to enable inclusive Just Transition investment plans. This Manifesto will be presented at the European SDG Summit 2022, at the high-level plenary “Financing an Inclusive Green Transition”, on October 12th. Register now.
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