People whose livelihoods are particularly impacted by climate change should have the opportunity to benefit from technologies like solar power and contribute to a lower-carbon, more resource-efficient economy. (Photo by iStock/CGShutter)
Climate change is impacting everyone, but its ongoing effects threaten the lives and livelihoods of some people more than others. According to the 2022 United Nations climate change report, 40 percent of the world’s population is highly vulnerable to the effects of climate change, meaning their physical and mental health is already affected by climate-related diseases and extreme natural events.
The report is just one of many clarion calls to act urgently, not just on climate change but also on climate justice: the process of finding solutions to climate change that also address social inequities due to gender, race, ethnicity, geography, income, and other factors. Acting on climate justice is important, because social inequities increase the severity of the risks and costs that vulnerable people face as a result of climate change. They also diminish people’s ability to participate in opportunities that will accompany the world’s transition to a lower-carbon, more resource-efficient, and more socially inclusive green economy.
Understanding and awareness of climate justice have evolved over the past few decades. Its roots lie in the environmental justice movement in the United States, where, in the 1990s, activists called out the disproportionate impact of pollutants on Black communities in North Carolina. In 2000, the organization Global Corporation Watch used the term in its report, “Climate Gangstas vs Climate Justice,” and from there, it took a more global focus. In 2002, attendees at the first Climate Justice Summit, held on the fringes of the sixth Conference of the Parties (COP6), highlighted the fact that the countries and communities least responsible for carbon emissions were suffering the worst consequences from them.
In recent years, the approach has gained traction and found its way onto more political and legal agendas. Climate justice was included in the 2015 Paris Agreement, for example, and the United Nations declared access to a clean and healthy environment as a human right in July 2022. And while the term didn’t appear at all in global media publications in 2001, it now appears in the media up to 5,000 times a year.
Why Climate Justice Matters to Business
All sectors have a role to play in achieving climate justice, but it’s fair to say that compared to government and civil society, business is late in addressing the challenge and is in fact frequently called out as part of the problem. However, recent trends and events have been moving climate justice up the corporate agenda as well.
First, the COVID-19 pandemic has exacerbated deep social inequities and vulnerabilities, just as climate change has. It has also highlighted human and environmental interconnectedness and galvanized large-scale, rapid collective action to respond and recover. As a result, business is increasingly interested in approaching environmental, social, and governance goals more holistically. A vanguard of business leaders is making public commitments to implement climate justice or just transition strategies, and explicitly highlighting the links between climate, human rights, and economic opportunities.
Second, investors, consumers, employees, and the general public all increasingly expect businesses to take direct action on jointly addressing climate and inequality. The 2022 Edelman Trust Barometer survey, for example, showed that more than 81 percent of survey respondents wanted CEOs to speak out on controversial issues, including climate change and inequality. Companies must increasingly respond to these changing expectations.
Third, political action on climate justice has accelerated in response to the increasing humanitarian and economic costs of climate-related extreme weather events, concerns around job losses, growing support for civil society movements such as Black Lives Matter and Fridays for Future, and United Nations-led efforts such as the Race to Net Zero and Race to Resilience. The Biden Administration’s efforts to jointly address racial and climate inequalities, for example the creation in September 2022 of a high-level Office of Environmental Justice and External Civil Rights within the Environmental Protection Agency, and the European Union’s New Green Deal reflect this. Businesses are responding, both in terms of taking direct action to stay ahead of evolving regulatory and legal requirements, and in some cases, advocating for governments to ramp up their efforts. The Transform to Net Zero initiative has identified climate justice as priority. Likewise, the Centre for Inclusive Capitalism is mobilizing business leadership around achieving a Just Energy Transition.
Finally, a growing number of companies recognize that the risks of inaction on climate change go beyond immediate economic and physical costs. (The billions of dollars US companies have spent repairing infrastructure damage caused by extreme weather events is just one example.) Increasingly, these include risks related to jobs; human rights; supply chain resilience; and even business models, security, and competitiveness. Beyond failing to address the worst impacts of climate change, even energy transition investments can have negative impacts on vulnerable people and create risks for businesses. A recent report, for example, identified almost 500 allegations of human rights abuse linked to the extraction of renewable energy transition minerals between 2010 and 2021. Unless companies actively pursue climate justice across their supply chains, they not only threaten the speed and scale of the transition to net-zero, but also risk exacerbating inequality and losing brand equity and stakeholder trust.
A New Framework for Business Action
Currently few resources exist to help companies identify and measure the social impact of their climate commitments, though the World Benchmarking Alliance is developing indicators that should help bring more consistency. Given this, and in the spirit of working collaboratively, the social impact community Business Fights Poverty, the Corporate Responsibility Initiative at Harvard Kennedy School, and the sustainability and climate-focused consultancy Change by Degrees have drawn on previous work to develop an action framework for businesses that want to tackle climate justice but don’t know how. The framework helps break down climate justice into manageable parts, and includes a diagnostic tool so that companies can assess what they’re doing already and where they can add real value.
The framework consists of a three-by-seven axis. First, it outlines the three spheres of influence a business can use: core business (including operations and supply chains), philanthropy (including community investments), and policy influence. These areas of influence were developed by Jane Nelson, director of the Corporate Responsibility Initiative at Harvard Kennedy School, and have been well received by companies over the years.
The framework also outlines seven main principles of climate justice, based on the Mary Robinson Foundation - Climate Justice principles. The framework is rooted in international and regional human rights law and applicable to a broad range of organizations but adapted for a business audience. Breaking down the concept of climate justice in this way has been useful to companies that are grappling with understanding and explaining the term to different parts of their organizations. The seven principles include:
1. Taking a people-centered and rights-based approach. Is the company committed to respecting human rights across its operations and its supply chains? Does it support the UN Guiding Principles on Business and Human Rights and apply these to the company's due diligence on environmental issues, including climate commitments? The consumer goods company Unilever offers a good example. It takes a comprehensive approach to human rights, and sees climate justice as less about doing new things and more about applying a social justice lens to its existing climate work.
2. Planning for a just transition. Does the company have a just plan to transition away from carbon? Are employees, workers, and host communities involved in planning for the transition? Do they have access to the training, skills, capabilities, and resources they will need to cope with and benefit from the energy transition? The tech company Meta, for example, powers its US data centers with 100 percent renewable energy. This power feeds into local electrical grids so that people living near data centers can benefit from renewable energy and will create 40,000 new jobs by the end of 2022.
3. Sharing burdens and benefits fairly. Do the company’s climate strategy and investments protect the most vulnerable people and communities from the impacts of climate change, the energy transition, and related policies? Are the benefits of the company’s climate actions (such as clean air, technological advances, and green jobs) accessible to all? As part of its commitment to 100 percent renewable energy by 2025, for example, Microsoft works with Volt Energy, a Black-owned solar energy development firm that will supply it with 250 megawatts of solar power. Both companies will invest a portion of the revenue from their electricity supply agreement in bringing renewable energy closer to communities that don’t currently benefit from existing public or private clean energy initiatives.
4. Participation, transparency, and accountability: How do the needs of the people most impacted by climate change and the energy transition inform the company’s policies and products? Who holds the company to account? How does the company make its commitments and actions transparent to employees, customers, suppliers, and host communities? The American outdoor clothing company Patagonia, for example, has established a long-standing relationship with the Gwich’in people of the Arctic so that they have a say in the company’s advocacy work to end oil drilling in the region.
5. Diversity, equity, and inclusion: Has the company identified how different people and groups are vulnerable to both climate change and climate action? Does a diverse and inclusive group of stakeholders contribute to climate-related decisions? Are the company’s commitments to diversity, equity, and inclusion linked to its climate commitments? The software company Salesforce, for example, focused its October 2021 Impact Lab on climate justice, with the aim of co-designing technology solutions for low-income communities of color who are affected by climate change.
6. Education and skills: Is the company investing in skills training, tools, and knowledge to promote climate justice, and improve future opportunities and resilience among employees and across the supply chain? For example, brewing company AB InBev piloted a program with the innovative finance start-up OKO to provide weather index crop insurance directly to the smallholder farmers in its Ugandan supply chain. As a part of the pilot, local agents from OKO registered farmers and provided training to help them assess how insurance could help improve the resilience of their farming operations from weather events like flooding or drought.
7. Partnerships: Is the company actively partnering with governments, suppliers, NGOs, and employee groups to overcome obstacles to advancing climate justice, and scale impact? For example, Transform to Net Zero has produced a guide to supplier-buyer engagement to reduce indirect emissions from supply chains.
Our diagnostic tool helps companies process these questions; determine where they are a “beginner,” “learner,” or “leader” across a spectrum of climate justice activities and intents; and decide what actions to take. “Leader” companies likely focus on addressing the risks and opportunities of climate justice in their core business operations and supply chains, for example, rather than only funding community projects or university programs that support climate justice. That said, moving from “beginner” to “leader” usually requires combinations of activities across all the spheres of business influence, and very few companies are anywhere close to being leaders yet.
From the Margins to the Mainstream
Most guides for business action on climate change focus on achieving reductions in the absolute amount of carbon a company emits or its carbon intensity, not the impact of reductions on workers or communities. By contrast, our framework aims to: a) help companies genuinely interested in climate justice identify where they can most effectively mitigate climate-related risks to people, and b) add real value to the company, its consumers and shareholders, and the communities where they operate.
The growth in business commitments to achieving net zero in recent years is a welcome trend, but commitments must expand to encompass climate justice. There is a vast opportunity for businesses to help lead the way in partnership with the government and civil society. The articles in this series will highlight some of the innovative ways multinational businesses—including Mars, Bayer, BlueOrchard (part of the Schroders group), Barclays, and Primark—are putting people at the heart of their climate action and helping move business from the margins to the mainstream on climate justice.
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Read more stories by Zahid Torres Rahman, Jane Nelson & Tara Shine.