Just transition
Principle that the low-carbon transition must distribute its costs fairly and protect vulnerable populations and workers.
Just transition refers to the principle that the shift to a low-carbon economy must distribute its costs and benefits fairly, protecting workers and territories dependent on carbon-intensive activities as well as vulnerable populations. Originating in trade union vocabulary then integrated into international climate agreements, the concept adds a social dimension to the environmental agenda, corresponding to the S of ESG applied to climate. For insurance, just transition translates into several issues: maintained access to cover in areas of rising risk, the just resilience variant facing growing uninsurability of some territories, and the social risk associated with activity closures. A poorly calibrated exclusion policy can conflict with just transition if it abruptly deprives regions of capacity without an economic alternative, which explains the growing interest in engagement rather than blunt exclusion.
Hypothetical case: the abrupt withdrawal of insurance cover from a mining region without an economic alternative illustrates the risk that a poorly managed transition weighs on the most dependent populations.
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.