The Institute for Sustainable Futures (ISF) was commissioned by the Global Compact Network Australia (GCNA) and National Australia Bank (NAB) to produce this report on the emerging just transition agenda for the corporate sector and financial institutions.
The focus of this report is the most immediate sector at risk – thermal coal used for power stations. In time, similar dynamics are likely to apply to other fossil fuels; alternatives are emerging to metallurgical coal for steel production, clean energy technologies and electrification are emerging as an alternative to gas and electric vehicles are emerging as an alternative to oil.
This report is intended to be a starting point for discussion on the role of corporates and financial institutions in planning for and supporting the delivery of a just transition in Australia. It is the beginning of the journey for Australian corporates and financial institutions, but the accelerating rate of change makes it increasingly urgent for the incorporation of just transition principles into their operations.
- There is a global clean energy transition occurring: the cost advantage of renewable energy and climate change drivers mean the question is no longer ‘if’ but ‘when’ and ‘how’ this transition occurs;
- The lesson from past restructuring is that a planned transition will ultimately be much lower cost and that an unplanned transition will have critical social and economic consequences for vulnerable communities and households;
- Workers and communities in coal regions are vulnerable to disruptive change: the coal mining workforce is dominated by prime-aged, semi-skilled machine operators in regional economies with a heavy dependence on the coal sector;
- A disruptive transition will have serious social and economic consequences not only in coal intensive regions but also beyond on the wider economy and the prospects for an efficient transition that manages climate risks effectively;
- Nations which are managing transitions for coal regions more successfully have built a social compact through multi-stakeholder engagement to develop overarching policy frameworks and specialist authorities with funds to plan for closures and diversify regional economies - to ensure ‘no-one is left behind.’