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By Michael Kraten, PhD, CPA

This article was originally published by the author on February 25, 2024.

Sustainability accountants, sharpen your pencils! The deadline for submitting comments about the new Climate Change exposure draft of the Global Reporting Initiative (GRI) is this Thursday, February 29, 2024.

The draft proposes updates to the climate change guidance that appears in a trio of GRI standards that were issued six years ago: 201 Economic Performance, 302 Energy, and 305 Emissions. The revisions are noteworthy because of their emphasis of a planning concept that was first defined by the American Labor Movement in the late twentieth century.

This concept, known as the Just Transition, posits that the American labor force should be compensated and retrained during our transition to a clean energy economy. In the current parlance of progressive activists, the concept encompasses the goals of climate justice and social justice.

The GRI proposes that organizations adopt a set of metrics that can be utilized to assess their commitment to the Just Transition of workers. For instance, the exposure draft requires the development of transition plans, followed by the measurement and reporting of metrics like the “number of jobs created, eliminated, and redeployed due to the transition plan (and) the number of employees that received training for up- and re-skilling …”

This emphasis on Just Transition planning is interesting for two reasons. First, it contradicts the criticism that climate change activists do not acknowledge and account for the significant economic and social costs of transitioning to renewable energy sources. Second, it reaches back several decades for a conceptual construct that had fallen out of fashion but that now resonates with contemporary business planners.

Do you have a strong opinion about Just Transitions? You still have time to share it with the GRI. Whether or not you choose to express your thoughts to them, it may be helpful for you to prepare a Just Transition planning policy for your own organization.

Originally published at All rights reserved by author.