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Farming, forestry and fisheries need a  ‘just nature transition’

Just Nature transition is one delivering decent work, social inclusion and the eradication of poverty.
Photo by Tim Mossholder on Unsplash

Banks and investors should make sure that their investments in the farming, forestry and fishing sectors deliver climate and biodiversity goals in ways that are fair and inclusive for workers, communities and consumers.

The financial sector has a critical role to play in the transition to a nature positive economy – and a just transition is necessary.

It’s a $10 trillion opportunity but many jobs are at risk in the agricultural transition.

The shift to a net zero and climate-resilient economy delivering biodiversity goals must address poverty and social challenges.

The latest report from the Grantham Institute and the LSE Just Nature: How finance can support a just transition at the interface of action on climate and biodiversity, warns that failure to place people at the heart of the shift to a nature-positive economy risks negative social impacts such as job losses and human rights abuses.

Finance will play a key role in a just nature transition

What needs to be recognised is the key role that the financial sector must play in ensuring that all investment decisions embed deep sustainability decisions. While ESG industry figures push back against regulation of the sector, financial institutions must build new international standards and processes to ensure long term economic stability in the face of climate change, resource scarcity and social inequality.

The authors draw attention to the 2020 World Economic Forum (WEF) report New Nature Economy Report II: The Future of Nature and Business which estimated that a nature-positive economy could create 395 million jobs by 2030, in an industry valued at over $10 trillion. But there will be job losses too: a 2015 study suggested 120 million fewer agricultural jobs in 2030 because of net-zero targets.

To manage the significant social implications, the authors call for the governments, business and civil society to support a “just nature transition”. They write: “We define the ‘just nature transition’ as one delivering decent work, social inclusion and the eradication of poverty in the shift to a net zero and climate-resilient economy that simultaneously delivers biodiversity goals in agriculture, forestry, land-use and the oceans.”

The report recommends that the finance sector should “purposely channel finance to companies committed to and making progress to support a just nature transition for workers, suppliers, communities and consumers”.

The financial sector should engage with policymakers to support a just transition

It also suggests that financial institutions should “engage with policymakers to reform agricultural, forestry and nature policies so that they support a just transition and provide the incentives, rules and catalytic public finance that is needed to scale up private investment”.

The authors state: “Financial institutions such as commercial banks and institutional investors have been increasing their efforts to support a just transition in the energy system. This needs to be extended to the nature dimension through strategic commitment, corporate engagement, capital allocation and policy dialogue to reform the system conditions.”

The report contains 15 examples of practical action that banks and investors are already taking. But the authors argue that: “There is a long way to go to get adequate commitment and real action for the just nature transition.”

Just transition will be as complex to address as climate change

One of the key points made by the authors is the importance of understanding crosscutting social priorities that will need to be addressed in order to accelerate the just transition.  This reflects the complexity that is required to effectively address many of the 21st century’s challenges. Climate, environmental and social problems are interconnected and need to be addressed across silos.

Some of the issues that the authors say need to be addressed include strengthening the enforcement of human rights and labour standards, making land tenure more inclusive, advancing the rights of Indigenous Peoples, empowering women and promoting gender equality, as well as ensuring meaningful social dialogue and stakeholder inclusion.

Naïm Abou-Jaoudé, Chief Executive Officer of Candriam, whose Institute for Sustainable Development provided financial support for the report, said: “Building an inclusive economy that protects and encourages nature goes hand in hand with tackling climate change, and it is a fundamental part of creating more sustainable and resilient societies.”

He continued: “That is why a just transition should be a top focus area for both the public and private sectors when they consider the impact of their decisions, operations, and investments. This important new report sets out five key recommendations for action required from the financial services industry, so we can ensure that more capital is directed towards the protection and enhancement of our environment and society.”

James Ritchie, Assistant General Secretary of the International Union of Food Workers (IUF), said: “As the climate crisis intensifies, a just transition is crucial for re-constructing an economy which serves both people and planet. All sectors require a transition and ensuring that workers and their representatives are included in its decision-making, along with affected communities, is critical to achieving the necessary speed and scale of change.”

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