A Framework for Investing in a Just Transition

Presents Veris’ Just Transition Investment Framework to identify investable solutions that address climate justice, environmental justice, and energy justice with a focus on under-resourced communities.

A Framework for Investing in a Just Transition
Research & Frameworks/Published: September 1, 2024/Author: Roraj Pradhananga, CIMA, CPA

What is a Just Transition?

A just transition is the idea that as the world moves from an extractive to a low-carbon regenerative economy, the transition must be inclusive and equitable and generate wealth in under-resourced communities that have faced systemic barriers to access to capital and opportunities to build wealth.

We believe investors can play a critical role in integrating just transition principles into the investment decisions that empower the clean energy transition.

A Framework for Investing in a Just Transition: Report Highlights

The report begins by detailing why we believe a Just Transition Framework is necessary, including disparities in health outcomes and disproportionate impact of environmental pollution and climate change on people of color, indigenous peoples, low-income communities, women, and coastal communities in the United States and globally. It also:

  • defines a Just Transition in context of the climate justice, environmental justice, and energy justice movements that inform Veris’ Just Transition investment lens,
  • presents Veris’ Just Transition Investment Framework to identify investable solutions that focus on under-resourced communities,
  • offers case studies of specific investment vehicles in private and public markets that we believe are enabling capital to flow to solutions that address climate justice, environmental justice, and energy justice,
  • shares interviews highlighting two institutions that have taken a leadership role in supporting a Just Transition – Heading for Change and Croatan Institute, and
  • explores potential policy changes that we believe are necessary to support a Just Transition.

The Components of the Veris Just Transition Investment Framework

Self Impowerment

Provide resources to support educational programs, technical assistance, and capacity building within vulnerable and impacted communities

Center General & Racial Equity

Incorporate opportunities for racial and gender equity approach at all levels of the firm and investments

Democratize Decision-Making

Utilize community-based decision-making practices involving all stakeholders, ensuring the inclusion of workers and BIPOC communities that have been historically oppressed

Support Workers

Ensure that workers are not displaced and receive the support they need to thrive in their home communities

Measure Impact Outcomes

Measure material social and environmental impact outcomes for individuals, families, and communities

Work for Policy Change

Advocate for policy changes to support a just transition at the local, state, federal, and/or global levels

Build Community Wealth

Ensure wealth creation in communities that are disproportionately impacted

Utilize a Blended Finance Structure

First loss capital plus catalytic capital allocation