To coincide with the announcement, Friends Provident Foundation and RLAM have produced a set of ‘expectations’ for energy utilities when developing just transition strategies. This will be utilised in further engagement with the energy utilities sector. It covers the key stakeholders of workers, communities, supply chains, and consumers.
Themes coveredjust transition
Applause for SSE’s sector first Just Transition strategy
Energy utility company SSE has just published a sector first Just Transition strategy. This followed investor engagement from Friends Provident Foundation and Royal London Asset Management (RLAM), who requested a formal strategy at SSE’s AGM in August.
We applaud SSE on the adoption of the energy sector’s first Just Transition strategy. This comprehensive strategy sets the standard for other energy utilities to follow and we hope to see more as we approach COP26 next year. We are delighted with the extent of SSE’s strategy, which seeks to mitigate the negative impacts of the transition away from fossil fuels for workers and communities, such as prioritising worker retraining and redeployment, and site redevelopment. But it also embraces the transition’s opportunities, such as the provision of good quality green jobs, supporting domestic supply chains, and sharing economic value with local communities, including devising the option of a simple shared ownership structure for onshore renewables. We thank SSE for the positive dialogue leading to today’s publication. It is imperative that companies and investors understand and act on the risk of ‘stranded people’ and ‘stranded communities’, in terms of skills and economic utility, as well as ‘stranded assets’. A just transition is a necessity for a rapid and resilient net-zero transition that leaves no one and no community behind.
We are delighted with the publication of SSE’s Just Transition strategy, which aims to ensure that action on climate change supports an inclusive economy. This announcement follows a proactive dialogue between RLAM, the Friends Provident Foundation and SSE, and clearly positions SSE as a leader globally. RLAM is joining the Financing the Just Transition Alliance this week, to signal our support for this important issue ahead of COP26. We will only be successful at tackling climate change if we also proactively discuss and address the social impacts that many people may feel as a result of the energy transition, such as job changes or impacts on their utility bills. We have created an expectations document, which can be used as a blueprint for other energy utility companies to follow SSE’s lead.
Friends Provident Foundation and RLAM have been undertaking a programme of investor engagement with large UK energy utility companies on the trends disrupting markets and business models, from decarbonisation to increasing democratisation, and covering issues such as business model resilience, net-zero and just transition strategy, lobbying alignment, and appetite to partner with community energy.
This programme of engagement incorporated recommendations from the Friends Provident Foundation grant funded ‘Financing the Just Transition’ programme by the LSE Grantham Institute. It has also been supported by fellow Shareholders for Change members EcoFi Investments (France), Bank für Kirche und Caritas eG (Germany), and Etica SGR (Italy).