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This report argues that in the face of growing climate risk, companies that integrate environmental, economic and social impact governance in their supply chains will be more resilient and better positioned to manage the climate change risks and the impacts of advancing a just transition to net-zero and environmentally sustainable economies.
Cargo containers waiting in port. Photo: Daniel Foster.
The concept of just transition has increasingly gained traction among large companies looking to accelerate the adoption of environmentally and socially responsible business conduct throughout their business operations. At the same time, regulatory developments have recently begun to impose requirements on companies to tackle issues relating to climate change and labour and human rights, with implications for the supply chains of businesses.
As industries shift towards a net-zero and climate-resilient economy, a just transition means promoting environmentally sustainable economies in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind.
The purpose of this business brief is to describe how companies can better manage the convergence of different climate risks that they are exposed to through their supply chains by placing just transition at the centre of their transition planning and risk management strategies and making it a key pillar of overall business management.
The authors offer five recommendations for businesses to improve the sustainability and resilience of their supply chains through a just transition:
1. Improve awareness of risks of social disruption and climate change in supply chains
2. Improve the transparency of supply chains
3. Integrate risk management through just transition principles
4. Create market demand from the public sector
5. Support capacity building and access to finance for small and midsize enterprises (SMEs)
Team Leader: International Climate Risk and Adaptation; Senior Research Fellow
SEI Headquarters
Perspective / Mikael Allan Mikaelsson, Adis Dzebo and Richard Klein share insights on how businesses can manage supply chain risks in a just way.
Perspective / Adis Dzebo, Richard Klein and Frida Lager share why is pivotal for businesses to apply justice lenses to climate adaptation actions
Past event / Join SEI experts at Adaptation Futures as they share insights on transboundary climate risks, supply chain resilience and justice in climate adaptation.
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