The European Bank for Reconstruction and Development (EBRD) said on October 29 the bank has joined other Multilateral Development Banks (MDBs) in committing to a just transition that supports its countries of operation in moving towards net-zero emission economies.
The MDBs on October 29 released a joint statement outlining their commitment to five High-Level Principles for a just transition.
The statement outlines how the MDBs will support countries in moving away from the use of fossil fuels and toward low greenhouse gas (GHG) emissions and climate resilience in a way that shares the costs and benefits, while supporting and protecting communities, industries, and workers.
The MDBs will also work with national development banks and other financial institutions to develop financing and policy strategies supporting a just transition that promotes economic diversification and inclusion, the EBRD said.
A just transition is part of the 2015 Paris Agreement, whose ambition is to keep the rise in global temperatures to 1.5°C compared to pre-industrial levels.
The need for a just transition is set out in the Paris Agreement preamble, which cites “the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities”. This is at the heart of the climate work of the MDBs as they work together to align their activities with the long-term goals of the Paris Agreement, and also observe the increased calls for a Just Transition in the EU and UK, among others.
The five principles are: delivering climate objectives while enabling socio-economic outcomes and building progress on Paris Agreement goals and the Sustainable Development Goals; support to move away from greenhouse gas emissions-intensive economic activities through financing, policy and advisory activities, and knowledge sharing; the mobilisation of public and private finance and enhanced coordination; support for affected workers and communities to mitigate impacts and increase opportunities; and transparent and inclusive planning and monitoring with relevant stakeholder and affected groups.
“These principles for a just transition will help us support our countries of operation as they move from carbon-intensive economies to more renewable and sustainable ones,” EBRD’s Harry Boyd-Carpenter said. “The principles provide high-level guidance to ensure that MDBs consistently, credibly and transparently contribute to the aims of a just transition – one that both shares the substantial benefits of climate action and supports those who risk losing economically, whether countries, industries, consumers or workers.”
Over the past year, the EBRD, already at the forefront of climate action, has further raised its own climate ambition by pledging to align all its operations with the goals of the Paris Agreement by 2023 and make more than half of its investments green by 2025.