Session 4, International Forum for Coal Regions in Transition

1. Financing a Just Transition
Beyond Coal
2 6 O c t o b e r 2 0 2 3

2. Financing a Just Transition Beyond Coal 2
PPCA: A Global Coalition
Committed to coal-fired
power phase-out in:
OECD/EU by 2030
Non-OECD by 2040
And restrict public and
private coal finance
50
national governments
49
subnational governments
70
private sector organisations
21
strategic partners
+

3. Priorities to 2025 3
How to Get Involved with the PPCA
Diplomat
icLeaders
hip& Co-
operation
Narrative
Building
Expertise Sharing
Membership and Political
Commitments to Action
Work with us to put coal at top of
international agenda and encourage
new members to join
Speak out publicly for PPCA goals
Share your experience and best
practice with other members and
potential members
Make a commitment to coal phase out
and benefit from expertise of the
Alliance

4. Today’s moderator
Rebekka Popp
E3G

5. Financing a Just
Transition from Coal
The Challenges and Some
Solutions .
Brendan Curran Senior Policy Fellow – Sustainable Finance, LSE
International Forum for Coal Regions in Transition, 26 Oct ‘23

6. LSE, GRI & Sustainable Finance
➢ A world-leading centre for policy and market relevant
research and guidance on climate change and the
environment
➢ Strategic focus on sustainable finance
❖ Leading efforts to finance a just transition (including
UK’s green gilt)
❖ Focusing on role of central banks and regulators in
net zero & nature
❖ Undertaking applied research with practitioners in
finance, policy and business

7. The growth story of the 21st century: strong, sustainable,
inclusive, resilient
7
Investment in sustainable infrastructure and other assets can boost shorter-run demand and growth, sharpen
supply and efficiency, reduce waste and pollution, promote sustainable development and reduce poverty.
Spur innovation, creativity and growth in the medium term, unleash new waves of innovation and discovery.
Low-carbon is the only feasible longer-run growth on offer; high carbon growth self destructs.
5 - 10 years
~ 20 years
~ 10 years
• This is a powerful growth story driven by investment and innovation.
• Strong job opportunities. Strong multipliers. Powerful effects on health and well-being.
• By 2030, low-carbon technologies and business models could be competitive in sectors representing over
70% of global emissions (today 25%)(Systemiq, 2020) .
• Not a story of cost but of large net benefits.
• Adaptation/resilience will be crucial. Many investments foster development, reduce emissions and promote
resilience (SRI for rice, public transport, building design, restoring degraded lands, decentralised solar…).
• But fundamental change involves dislocation of work and changing relative prices. Political economy and
ethics. Support training, skills, places, and relocation where necessary. Revenues to protect the poor.
• In other words, a just transition…

8. 8
Increasing climate
ambition
Delivering social
justice & decent
work
Just Transition
2015 Paris Agreement ILO Just Transition Guidelines
A Just Transition involves maximising the social and economic opportunities of climate action while minimising and carefully managing
any challenge – including through effective social dialogue and respect for fundamental principles and rights at work..
What is a Just Transition?

9. Global Energy Transition = Net Positive Global Jobs
According to the International Energy Agency
scenario planning the transition will create:
• Net positive job creation globally
• Across high, medium and low skilled
workers
• Across genders
So, there is little to be concerned about?
Local realities are a little different.

10. Policymakers Should Take the Lead on the
Just Transition

11. Policymakers are responding with public finance
and policy
Examples include:
• The European Union has taken a lead with its Just
Transition Mechanism and Social Climate Fund
• South Africa Presidential Climate Commission has
focused on a “just energy transition”
• Just Energy Transformation Partnerships (JETPS):
• Indonesia
• Vietnam
• South Africa
• Senegal
President Trump, 2017
‘I happen to love coal miners’

12. Confronting the tough issues
• What is just? Wide variations in understanding of
procedural, distributive and restorative justice… But we
have international principles from the ILO and UN
• What are the roots of the problem? The just transition
means confronting the deep roots of injustice: income &
wealth, gender & race, location & age.
• A force for delay? The just transition can be used as a
tactic for delay … investors need to be ready to
challenge and overcome these arguments
• Who’s responsible? Managing the transition is a shared
task that needs governments, business, workers and trade
unions, communities and citizens… and investors

13. What is the Role of Finance in Delivering a Just
Transition for Coal Businesses and Economies?

14. Rationale for financial institution action
➢ If net zero is the what, the just transition is the how
• The right thing to do: realising human rights and
shaping the shift to deliver positive social impact
• The necessary thing to do: building public trust and
support, and reducing systemic risks to transition
• The smart thing to do: developing the social and
human capital for a successful net zero economy
➢ Something for every financial institution to include in
their net-zero transition plans

15. Unions and business,
governments and
regulators, banks and
investors are committed
to the just transition.
Now to move from
commitment to financial
application.
What is Just Transition Finance?

16. Net Zero Transition Plans – Including the Just
1. Foundations: commitment to human rights and
just transition in overall strategy.
2. Implementation: actions to make just transition
a reality in fossil fuel phase-out.
3. Engagement: supporting suppliers, dialogue
with policymakers, participation of affected
stakeholders (workers, communities).
4. Metrics and Targets: procedural (eg worker
participation) and outcomes (eg retraining)
5. Governance: role of board and other
stakeholders in overseeing just transition;
building the corporate culture for inclusion.

17. Investor action: Corporate Engagement/ Stewardship
Setting Expectations & Assessing Action:
consistent expectations of companies are
essential to enable benchmarking to drive
accountability and performance
1. Climate Action 100+: over 570 investors
with over US$54 trillion AUM - assesses
progress on the just transition
2. World Benchmarking Alliance: analysed
180 energy companies: only 5% scored
more than 50% and all European
Reference: Climate Action 100+ (2023)

18. Product Innovation: GSS+ Bonds
• Increasing issuance of green, social, sustainable and
SLBs in recent years.
• Improvements in issuance guidance – Green, Social
and Sustainability Linked Bond principles as well as
Sustainability bond guidelines.
• As well as Climate Transition Finance Handbook
• Some issuances supporting a just transition but is there
an opportunity to drive more activity?
Energy Transition Bond

19. Public-private partnership, blended finance
and MDBs

20. Multilateral Development Banks
• MDBs and DFIs have a crucial role to play in the transition
– Providing concessional finance to emerging markets
and allowing low carbon technologies to mature
• Ensuring that retraining, reskilling, economic diversification
are stipulated in instruments/ investment programmes.
• Already a lot of interesting practice in this space
• Asian Development Bank (ADB) recently launched their
Just Transition Support Platform

21. Case Studies
ZE PAK (Poland) Collie (Western Australia)
The Polish energy utility Ze Pak is a majority
owned by a private investor.
• Currently focused on lignite based electricity
generation in Eastern Wielkoposka.
• Ze Pak aimed to scale up energy production
from RE and hydrogen
• As part of this, undertook training programme
for existing workers to learn solar PV skills
Collie is a town of just 7,559, is home to three
power stations and is responsible for 17% of
Australia’s total GHG (Godden, et al, 2022)
• 2019 – two stage retirement of the two state-
owned coal-fired plants in Collie
• 662 million AUD has been committed to
Collie’s Just Transition plan by Western
Australian government
• 3.5 billion AUD is planned over next 10 years
RE capacity
• Clear policy direction has aligned business,
finance and other actors.
(A Future Worth Living, 2023)

22. References
1. Climate Change and the Just Transition: A guide for investor Action report with the Principles for Responsible Investment (PRI), the
International Trade Union Confederation (ITUC) & Harvard Kennedy School (2018).
2. The Green + Gilt how the UK launch a green sovereign bond with social co-benefits, with the Green Finance Institute and the Impact
Investing Institute (2020)
3. From the Grand to the Granular: translating ambition into investor action in the utilities sector (2021)
4. Just Zero first report of the UK Financing the Just Transition Alliance launched at COP26 (2021)
5. Financing the Just Transition Beyond Coal with the Powering Past Coal Alliance (2021)
6. Making Transition Plans Just how to embed the just transition into financial sector net zero plans (2022).
7. ILO/LSE Just Transition Finance Tool for bankers & investors launched at COP27 (2022) jointly produced with the International Labour
Organisation
8. Just Finance India mobilizing private investment for the just transition, with British International Investment, the Environment
Management Centre (EMC) and Suranjali Tandon (2023).
9. From Theory to Action: Implementing a Just Transition in Rural Australia, A Future Worth Living (2023) [ Rosanna Crawford and Kaisie
Rayner)
10. The State of Coalfields: Economic and Social Conditions in Forming Mining Communities of England, Scotland and Wales, Sheffield
Hallam University (2005)

23. b.curran2@lse.ac.uk

24. 24
Today’s panel speakers
Rebekka Popp
E3G
Brendan Curran
Grantham Research
Institute
Annika Brouwer
NinetyOne
Camilla Roman
ILO
Anna Vasylyeva
EBRD
Eduardo Jose Sanchez Sierra, GIZ

25. Work With the PPCA
(1) Join us as a Member
(2) Work with us as a Partner

26. Thank you.
Connect with the Powering Past Coal Alliance Team
Binnu Jeyakumar, Senior Advisor
Binnu.Jeyakumar@poweringpastcoal.org
Helena Gray, Program Officer – Thematic & Network
Helena.Gray@poweringpastcoal.org
Lorane Collignon, Program Officer – Non-OECD
Lorane.Collignon@poweringpastcoal.org
Caitlan Read, Secretariat Coordinator
Caitlan.Read@poweringpastcoal.org
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