On 17 March, TUAC held a meeting of the Working Group on Multinational Enterprises, including discussions on the role of National Contact Points and the interplay between the OECD Guidelines on Responsible Business Conduct and binding due diligence legislations such as the EU Due Diligence Directive.
The meeting featured a dedicated session focusing on the new Framework on RBC for a Just Transition currently being developed by the OECD – a process in which TUAC is actively engaged. Over 25 trade union representatives from all regions, including South Africa, Indonesia, Peru and Costa Rica, engaged with OECD representatives and NGOs to discuss the challenges raised by the green transition and the specific role and responsibility that MNEs have in advancing a just transition.
The discussions highlighted the outsized impact of multinational enterprises on global emissions. According to a 2023 report from the World Bank, the direct activities and supply chains of 157 large MNEs jointly account for up to 60 percent of total global industrial emissions. While 10 percent comes from MNEs’ direct activities, their supply chains account for another 50 percent of global emissions.
Participants also noted that businesses referring to just transition as a framework for climate action is on the rise, but evidence of implementation remains extremely limited. While the concept is increasingly being embedded into corporate policies, it appears to rarely translate into concrete climate actions and commitments. The World Benchmarking Alliance’s assessment of 180 companies in high-emitting sectors found that only 6 percent demonstrated meaningful engagement with workers affected by the transition.
In this context, TUAC participants strongly emphasised that the forthcoming OECD Framework must adopt a rights-based approach, aligned with the 2015 ILO Guidelines on Just Transition. They highlighted collective bargaining as a critical mechanism for navigating the transition, both in terms of adaptation and mitigation policies, and stressed the key role of Global Framework Agreements.
Participants emphasised that measures must uphold fundamental principles and rights at work and ensure that workers have access to social protection and remedies such as compensation for jobs and income losses.
The OECD Guidelines provide an important policy framework for governments to advance a Just Transition through Responsible Business Conduct and ensure that MNEs abide by environmental and social standards. TUAC will continue to actively engage in the ongoing OECD work on a new Framework, which represents a key opportunity to take this agenda forward, in coordination with other actors, governments, business representatives and NGOs.
The forthcoming OECD Framework marks a crucial initiative to ensure that the risks and benefits of climate transition are distributed fairly, and that workers’ rights remain protected throughout global supply chains as industries transform to meet climate goals.
Photo credit: Marcel Crozet / ILO
