Along with its partners as part of the Paris Aligned Investment Initiative (PAII), IIGCC has released NZIF Supplementary Guidance on Just Transition.
‘Just Transition’ refers to a dynamic and evolving concept that is increasingly seen as a necessary element of effective net zero strategies. Rooted in the Paris Agreement, it incorporates workforce transition, community resilience, and often place-based planning to mitigate the social impacts of moving to a low-carbon economy.
Although there is no universal definition, a 'just transition' broadly integrates social and environmental concerns in the shift to a low-carbon economy. It aims to balance fairness and equity with climate ambition, ensuring ‘no one is left behind’.
For institutional investors, just transition is integral to managing risks and preserving long-term value. Investors who consider these dimensions may be better positioned to mitigate risks such as policy pushback, project delays, and litigation, while also identifying new avenues for long‑term value creation.
The new supplementary guidance builds on NZIF 2.0 by helping investors seeking to integrate just transition considerations into their individual net zero strategies, consistent with fiduciary duties and diverse institutional mandates. NZIF includes just transition within its multi-criteria maturity scale under the ‘asset-level assessments and targets’ component, to be incorporated where feasible and drawing on resources such as Climate Action 100+ Disclosure Framework. This guidance supports investors seeking to go further by addressing data gaps, offering tools, and helping them embed just transition more comprehensively across strategies and asset classes.
The guidance is accompanied by 'Just Transition in Action', which provides practical, real-world examples of how investors can translate just transition principles into practice. The report is organised around three broad areas of action that map to the NZIF 2.0 framework and includes nine investor case studies.
Across all three areas, the examples highlighted below from around the globe demonstrate that investor‑led approaches to just transition are emerging, adaptable and increasingly actionable. While the field is still evolving, investors already have access to practical tools, metrics, and tested examples that can support credible integration of social considerations into net zero strategies.