TUAC welcomes the launch of a new OECD tool on Responsible Business Conduct for a Just Transition, providing concrete guidance on how multinational enterprises should prevent, address and remedy the potential adverse social impacts of climate action in line with the OECD Guidelines. The stakes are high: the activities and supply chains of just 157 large multinationals account for up to 60 percent of total global industrial emissions.
While references to “just transition” in corporate financial and non-financial reporting have risen significantly in recent years, implementation remains far behind. Concerns are mounting over the risk of “just transition washing”, with corporate commitments frequently failing to align with key standards. A World Benchmarking Alliance assessment of 180 companies in high-emitting sectors found that only 6 percent demonstrated genuine engagement with workers affected by the transition.
TUAC and its affiliates pressed the OECD throughout the drafting process – spanning over a year and a half – to ensure that workers’ rights and collective bargaining are embedded at the centre of the tool, in line with the ILO Guidelines of 2015 and the Paris Agreement. The tool sets out specific “Key Actions” for business, stresses the importance of meaningful stakeholder engagement, and recognises trade union involvement as central to each stage of the transition, from designing company-level just transition plans to decisions on disengagement from highly emitting activities. It establishes that disengagement should only proceed as a last resort, after all alternatives have been explored and in consultation with workers’ organisations, with adequate compensation for job losses.
This new OECD tool fills an important policy gap and provides concrete guidance for corporate action. The real test for this tool is whether businesses act on it. Too many companies have embraced just transition language while doing little to protect the workers and communities affected by the shift to a low-carbon economy. Trade unions will be watching closely – and will continue to hold multinationals to account where guidance is not matched by action.
