Policymakers should aim to promote initiatives that enable collective gains across all segments of society to secure a broad base of support for the economic transition, according to the latest research report published by the Principles for Responsible Investment (PRI).
Unveiled at their annual conference, PRI in Person, the paper explores the social dimensions of the economic transition to net zero, presenting a policy framework aimed at supporting policymakers to identify the negative impacts of the transition as well as informing investor engagement on social issues.
The report reiterates the need for a whole-of-government policy approach to the economic transition, presenting a holistic framework that considers mainstream policies relevant to the transition and key levers to drive policy reform.
“Investors play a pivotal role in supporting the transition by engaging with policymakers to develop socially conscious transition policies. This paper proposes a holistic approach to policy making for the economic transition, informed by the real needs and context within which key decision makers operate,” said Margarita Pirovska, director of global policy at PRI.
“The economic transition is an opportunity to build a model for sustainable, inclusive and resilient growth, but only if we account for the socioeconomic implications of the transition and broaden the scope of stakeholders to consider society as a whole.”
Addressing the recent backlash against the net-zero transition, the paper builds off a previous PRI white paper on investing in the economic transition, which recognised the need for a clearer view of how socio-economic conditions and the protection of fundamental rights can affect the success or failure of policy interventions toward the economic transition.
This comes as the United Nations polled 77 countries, representing 87% of the world’s population, about their attitudes towards climate action. Globally, 80% reported wanting their governments to take stronger action in addressing climate change. At the same time, large parts of society are concerned about the cost of living and climate-related taxation.
Maria Nazarova-Doyle, global head of sustainable investment at IFM Investors, added:“The global energy transition is all-encompassing and can only be successful if people are at the heart of it. Yet, only about a third of national climate plans have any formal considerations targeting the social dimension of the energy transition.
“A step up in policy levers is urgently required to ensure this enormous societal transformation is smooth and successful. Efforts like this report from the PRI go a long way towards supporting developments in this area and it’s been a privilege to contribute to this work.”
