Fairness first for a just transition to net-zero

21 Apr 2023

How do we make the massive leap to net zero without leaving anyone behind? Start with a philosophy of “nothing about us without us” said speakers shining a spotlight on social sustainability at TRANSFORM.

The term “just transition” has emerged as short-hard for a host of hard-to-address social issues as the world moves towards net zero.

This social dimension – the “S in ESG” – is often overlooked because the big picture planetary challenges loom so large. But the toughest challenge in the net zero transition is to ensure those who have already paid the most shouldn’t have to pay again, said KPMG Australia’s Chief Purpose Officer, Richard Boele.

Recent analysis from Standard Chartered, one in dozens of alarming proof points, estimates emerging markets must invest US$94.8 trillion – more than the world’s total annual economic output – to meet global climate change targets by 2050.

Finding the funding for the transition could pile more pressure on some of the most disadvantaged countries and communities. Standard Chartered suggests household consumption in emerging markets could be, on average, 5% lower per year, making households around $2 trillion poorer annually between now and 2060.

How can Australia’s property companies ensure they are active participants in a just transition?

New and nuanced conversations

Richard began the session with a warning of “green colonisation” and a “second wave of potential negative impact and cost” to vulnerable First Nations communities.

Embracing clean energy at speed, Richard noted, requires vast quantities of minerals and metals for wind turbines, solar panels and batteries for electric vehicles. The University of Queensland's Centre for Social Responsibility in Mining, for instance, has identified 5,097 mining projects involving about 30 minerals, some 54% located on or near Indigenous peoples’ lands.

Net Zero Australia has found northern Australia could be transformed into a series of solar and hydrogen hubs, larger in size than Tasmania, on lands controlled by Indigenous people. The “sheer volume” of land required for the transition will be challenging for other communities, Richard later added, referring to growing opposition to windfarms as an illustration. New and nuanced conversations with farmers, landholders, Traditional Owners and other community groups must begin today.

Green skills gaps

Net Zero Australia also estimates up to 1.3 million new workers will be needed to fuel the net zero transition; most of these workers will need technical skills in renewable generation, transmission, energy storage, clean hydrogen and more.

This same story is playing out in countries around the world, which means “reskilling has to be starting now because everything is going to move fast,” noted the World Green Building Council’s CEO, Cristina Gamboa.

“Construction around the world is almost 30% of GDP and millions of people depend on [construction] for jobs.” The transition to the green economy can embed best practice human rights into the built environment with jobs that are healthy, diverse, inclusive and fair.

Deloitte estimates that more than 800 million jobs worldwide are highly vulnerable to climate extremes and the economic transition to net zero. But with the right policies in place, more than 300 million additional ‘green collar jobs’ can be created by 2050.

“Systems solutions from the ground up” must start the poorest and most vulnerable communities, Cristina said.

Healthy homes for a healthy planet

One billion people already live in slum conditions – and without action this will increase to three billion, Cristina noted. The world is adding a city the size of Paris each week, according to the WorldGBC.

Colombia, Cristina’s homeland, boasts the world’s second most biodiverse natural environment, but also the second highest rate of internally displaced people. More than 5.6 million people have fled rural areas following violence and conflict. "Imagine the pressure on our cities,” she said. This “unchecked” urbanisation will have a catastrophic effect on Colombia’s biodiversity – but also on millions of people. The story is similar in Africa, which will be home to four billion people by the end of the century, Cristina said.

“Temperature-linked deaths are already, around the world, at five million per year – that’s more than at the peak of Covid.” Eastern Europeans suffer from the most heat-related deaths, while the most casualties from the cold are in Sub Saharan Africa. This underscores the inadequacy of homes that are “not fit for purpose”.

"This is a problem right here, right now,” Davina Rooney added, pointing to the poignantly titled Cold and lonely study. This revealed 87% of elderly Australians presenting at emergency departments with hypothermia are found indoors.

The WorldGBC has a clear vision of healthy homes for a healthy planet. It is possible to build low-carbon, decent, affordable, well-ventilated and resilient homes that are sensitive to location, culture and heritage. Good practice starts with “empathy,” Cristina said.

Empathy leads to empowerment

The social topics on the table during TRANSFORM were vast, from energy poverty and women’s empowerment to designs that respond to the lived experience of people with disabilities. Engaging with each group starts with a common commitment to “change our mode of listening,” Richard noted. Empathy can lead to empowerment, Cristina added.

“I absolutely love the phrase: ‘Nothing about us without us',” Richard reflected. “This can be generalised in terms of any decision. Have we actually heard the people who will be impacted?”

Tackling the S in ESG to achieve a just transition will require deeper engagement with communities, more “patience” from capital, and perhaps expectations of “a slightly lower rate” of return, Richard suggested. But failure to act can be more costly. Looking at social sustainability through a “risk lens” can often be the impetus for investment, Davina said.

Richard challenged the TRANSFORM audience to use talk of the just transition to spark new conversations with key decision-makers and capital partners. “I’d say you've got permission because the S in ESG is what capital is looking for more answers to,” Richard added.

“Being inclusive is hard.” The “test” of true inclusivity is discomfort. “If you are not feeling uncomfortable when you are being inclusive, then perhaps you are not being inclusive in the right way. Being inclusive is uncomfortable.”

If you enjoyed reading about this session at TRANSFORM don’t miss the latest episode of our podcast, The Voice. Listen in to hear a recording of the TRANSFORM session ‘Enablers for future grid stability and security.

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