Key Stakeholders Call for Collective Action to Finance a Just and Urgent Energy Transition

Coal-fired power plants generated 9 billion tons of carbon emissions worldwide in 2020, representing 26% of global carbon emissions and nearly three-quarters of emissions from the electricity sector. Most coal-fired power capacity is in developing countries, where coal dependency remains high. Many developing countries have limited fiscal capacity and so require support to phase out and replace coal-fired power with clean, affordable, and reliable electricity and to provide a just transition for affected workers and communities.

Members from three platforms of the World Economic Forum – the Sustainable Development Investment Partnership (SDIP), the Platform for Shaping the Future of Energy, Materials and Infrastructure, and the Civil Society Community – are launching the Principles for Financing a Just and Urgent Energy Transition (“JUET Principles”), an initiative to help mobilize investment and accelerate financing for a just energy transition in developing countries.

This initiative consists of eight principles designed to guide investment and financing decisions and facilitate collaboration among stakeholders across the energy transition ecosystem, including governments, businesses, financial institutions, philanthropies, and groups representing labour, civil society, and the environment.

The principles address the economic, development, social, and environmental dimensions of a just energy transition. Alongside these principles is a “call to action” to the Parties at COP26, which aims to highlight and galvanize support for key actions and decisions needed from governments to enable and help fund the energy transition.

The JUET Principles have already been endorsed by 6 organizations across the private sector and civil society, including HSBC, International Trade Union Confederation (ITUC), Private Infrastructure Development Group (PIDG), Prudential plc, Sumitomo Mitsui Banking Corporation (SMBC), and the World Wildlife Fund (WWF).

“Energy transition is not just about adding more renewables to the grid. It’s much more than that,” said Mr Allard Nooy, CEO of InfraCo Asia. Also critical are the transition plans, supporting infrastructure (e.g., grids), and complementary strategies (e.g., energy efficiency) needed to enable the phase out and replacement of coal-fired power with clean, affordable, and reliable electricity. The route to net zero requires a level of urgency from all stakeholders. We have no time to waste.”

“We are in a race against time for people and the planet, and energy transition is the foundation for climate stability. This transition is urgent,” said Ms Sharan Burrow, General Secretary of International Trade Union Confederation, “but it must also have the support of workers and their communities which requires just transition. The JUET principles are a sound basis for action.”

“We are a business focused exclusively on markets in Asia and Africa, many of which need to stimulate and grow their economies after suffering disproportionately from the effects of Covid while also ensuring energy security and a transition to low-carbon alternatives,” said Mr Mark FitzPatrick, Group Chief Financial Officer and Chief Operating Officer at Prudential plc. “People and governments from the middle- and higher-income international community can support these goals, through funding, technology transfer and capacity building. We hope that the Principles will help to motivate public and private actors to create an environment which delivers a just and inclusive energy transition which benefits us all.”

“The Principles aim to accelerate funding and collaboration which are both key in achieving a Just and Urgent Energy Transition,” said Mr Yoshiaki Kageyama, Managing Executive Officer & Co-Head of Asia Pacific at SMBC. “The Principles are in line with our aim to contribute to resolving environmental issues described in the SMBC Group Statement on Sustainability, and we are looking forward to working together”

“We welcome this commitment from private financial institutions to help prepare and implement just and urgent energy transitions, and we look forward to concrete policies from institutions and investors to reflect the JUET principles,” said Mr Dean Cooper, Global Lead – Energy Transition, Climate and Energy Practice at WWF. “Support from financiers for ambitious, 1.5C-aligned policies is critical; only with cooperative and consistent action across all sectors and transitions can we achieve a just energy transformation globally”

“Addressing the climate crisis will require innovation – not just in technology, but in the way we work together to solve common problems. These shared principles should underpin efforts towards a just and inclusive transition, across both public and private organisations, to create real impact,” said Mr Christian Deseglise, Managing Director of Sustainable Finance and Investments at HSBC. At HSBC we’re mobilising finance to support our customers’ transitions to net zero, accelerating innovation to help scale up climate solutions and building global partnerships to ensure investment is swiftly channelled towards truly sustainable projects.”

The JUET Principles will be presented and discussed at COP26 during the World Wildlife Fund (WWF) event A vision for “Just Energy Transformation” worldwide, and the impact on ambition on 4 Nov.

The World Economic Forum invites stakeholders from across the energy transition ecosystem to support the JUET Principles and demonstrate a higher level of leadership and ambition for a just energy transition in developing countries. By working together, stakeholders can create economic, social, and environmental benefits for people while helping safeguard the planet for future generations.