The Just Transition
The Just Transition: a socially fair and inclusive climate transition
To address environmental emergencies, governments and companies must make a Just Transition, that is a transition to a low carbon world that respects the environment and biodiversity, while being inclusive from a social and territorial point of view. Among the leaders in sustainable bond with €25bn invested in this market, Ostrum Asset Management believes that finance has to play a major role in this transition. To participate in these fundamental changes, we have launched a fixed income impact strategy dedicated to the Just Transition.
The Just Transition, an important theme since 2015
The Paris Agreement (COP21, 2015) recognises the urgent need for a rapid and equitable transition. This is the starting point for raising awareness of the impacts of the ecological and energy transition on workers, communities, consumers, and citizens. Because the necessary transformation of industries and the economy will affect the number, type and location of jobs, with workers moving from declining sectors to innovative enterprises.
Well managed, this transition can generate new jobs and inclusive growth. That is why since 2015 we have seen the emergence of regulations and collective engagement actions to move towards a Just Transition, which minimises the negative social benefits of the ecological transition and maximises the benefits, for example on the creation of green jobs.
Paris Agreement (COP21) : "the importance of minimising negative repercussions from climate policies and maximising positive social impacts for workers and communities"
Sustainable Developments Goals, ONU
International Labor Organisation (ILO) "Guidelines for a just transition towards environmentally sustainable economies and societies for all"
OCDE Report "Foreword, The Imperative of a Just Transition"
COP24 conférence Climat - The Just Transition Declaration , signes by 53 countries
A commitment to the Just Transition, 140 institutions with US$8 trillion in assets
European Just Transition Mechanism
Notion of "Minimum Social Safeguards" included in the European Taxonomie
Investors for a Just transition (Finance for Tomorrow)
22 investor members, €4.3 bn assets
Statement of Investor Expectations for Job Standards & Community Impacts in the Just Transition
Project of a European Social Taxonomy
Invest for the Just Transition according to Ostrum AM
Investment strategies linked to the climate transition must therefore combine all dimensions of responsible investment: Environment, Social and Governance (ESG). And to achieve this Just Transition, at Ostrum AM we have developed an impact strategy targeting three dimensions.
Reduce carbon footprint
- Renewable energy,
- Environmental solutions & services,
- Green buildings,
- Clean mobility,
- Circular economy.
Promote a positive social impact
- Health & wellness (infrastructure, food security)
- Inclusive development
Preserve ecosystems and local economies
- Real economy financing,
- Agriculture & sustainable food,
"Integrating the Just Transition theme into our investments allows a better assessment of risks, while being a source of value creation in the long term for our clients"
Olivier Vietti, Portfolio Manager for the Ostrum Global Sustainable Transition bonds strategy
"With a holistic and inclusive approach to sustainable development, the Just Transition theme allows for a selection of the best economic projects that contribute to the ecological transition from both an environmental and social perspective."
Nathalie Beauvir Rode, Head of Sustainable Bond Analysis