Build a Just and Inclusive Economy

A Just and Inclusive Transition

Enable a just and inclusive transition toward an economic future that supports the well-being of workers and their communities. Companies avoid adverse impacts to people that occur as a result of internally and externally driven business model disruption (e.g. clean energy transition, automation/AI, resource scarcity, etc.) and embrace sustainable business models that engender greater social equity.

Companies commit to developing a human capital management strategy that works in concert with a robust human rights management system in anticipation of and preparation for internally and externally driven business disruption and transformation. In doing so, companies simultaneously recognize the value of the workforce as an asset by protecting worker well-being and building the resilience of its workforce through the diversification and strengthening of worker skill sets aligned with the future of work. In 2020, companies will: 
 

  • Conduct scenario analysis to proactively identify and assess economic, environmental and labor trends that may affect the current and future direct and indirect workforce, including, but not limited to: automation, digitization, consumer preferences and demand, the effects of climate change on specific industries and/or sourcing regions, and the transition to a low carbon economy 

  • Assess the potential for human capital-related stranded assets and forecast future skill needs and employment opportunities across the company’s workforce, funding, designing and providing equitable access to training programs. 

  • Engage in social dialogue with employees, worker representatives, local and national government, and constructively consult with suppliers, communities and peer companies (pre-competitively) to identify solutions that proactively avoid business model disruption and enable a just transition that is inclusive of worker voice and experience. 

In support of goals to develop a comprehensive human capital management strategy that enables a just and inclusive transition for direct and indirect workforces and impacted communities, in 2025 companies will:
 

  • Integrate data gathered on business and workforce vulnerabilities into strategic planning, business priorities and human capital management systems

  • Work collaboratively with employees, worker representatives, suppliers and other stakeholders to identify solutions that allow for the avoidance of business disruption and provide equitable access for upskilling, job retraining and placement, with a particular focus on historically disadvantaged and underrepresented groups

  • Where disruption is unavoidable, implement programs and partnerships that provide the opportunity for employees most vulnerable to economic and labor shifts to transition into other productive roles that provide a living wage

  • Leverage multi-stakeholder collaboration to share solutions and lessons learned related to effectiveness, potential for replication and application at scale with intra-industry and cross-industry peers 

By 2030, companies have implemented a comprehensive human capital management strategy that works in concert with a robust human rights management system, simultaneously respecting human rights while also building the resilience of its workforce through the diversification and strengthening of worker skill sets aligned with the future of work. Companies recognize the business benefits of supporting a just transition for employees and communities, and require that the human impact for business model transitions are examined and integrated into strategic planning, investment, and financing decision-making. Companies proactively identify solutions to avoid business disruption and engage impacted workers and communities in the development of solutions to enable a just transition that is inclusive of worker and community experience.

Just Transition with a Gender Lens

The World Economic Forum estimates that 42% of core skills required to perform existing jobs are expected to change by 2022, and that the technologies of the Fourth Industrial Revolution will drive the need to reskill more than 1 billion people by 2030. As with most economic, social or environmental disruption, the burden of change falls disproportionately on those in the community who are already most vulnerable—namely women and historically disadvantaged and underrepresented groups. 

The advancement of new technologies often brings higher paid, higher skill jobs. These jobs often require retraining and education that is quite often not made available to women and historically disadvantaged groups. Through collaboration with industry peers and shared suppliers, companies can establish and implement principles that contribute to providing equal opportunities for women and other historically disadvantaged and underrepresented groups to access training that will equip them with the skills necessary to compete and succeed in the future economy.

Getting Started

This section of the Ceres Roadmap 2030 identifies the foundational steps companies can take to begin implementing the actions needed to build a just and inclusive economy.
 

✓ Engage Role Players

To capture the full breadth and depth of the risks and opportunities related to building a just and inclusive economy, companies should consider the role of various business units across the value chain and regularly engage with business unit leaders to analyze the intersection between human rights and human capital risks and opportunities and their processes.  Upstream, human rights and human capital related opportunities may take the form of engaging tier 1 and tier 2 suppliers to evaluate and remedy human rights impacts. Within operations, these opportunities may take the form of addressing the wage gap or providing unconscious bias training for employees. Engaging business unit leaders will uncover better solutions and make the process of establishing workforce accountability easier. Concurrently, business unit leaders and senior management need to establish fluid lines of communication and disseminate key risks and opportunities into clear messaging that will engage board members. Complementary board oversight and accountability from the top down will support the integration of sustainability priorities across the business, informing strategic and annual planning and ensuring the proper allocation of resources for achieving stated goals. 
 

✓ Connect the Dots

Building a just and inclusive economy starts by understanding the business’ fundamental relationship between people, labor and human rights.  Using the lens of saliency, which helps to identify those issues with the greatest potential for adverse impacts on people, and applying it to business strategy and decision-making, reinforces a company’s values and strengthens the fabric that holds the company together.  
 

✓ Establish Policies

Companies just getting started will want to first establish company wide policies that support the intention to respect fundamental human rights, applying the same commitment to both direct and indirect employees across the value chain. Corporate policies should align to the fundamental human rights as identified in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the Universal Declaration of Human Rights. These policies and commitments should then be made part of human rights and human capital management systems aligned with the guidelines set forth by the UN Guiding Principles on Business and Human Rights. 
 

✓ Build a Management System Designed for Evolution

While the policies and management systems are intended to be permanent, the reality is that human rights and the potential for impact to people across the value chain is constantly changing. Integrating salient issues into the risk assessment and decision-making processes is essential. However, decisions made outside of the company, by other parties and in other regions can have downstream impacts on the company and its people.  Therefore, specific processes, assessments and key performance indicators require periodic review to ensure there is accurate management and monitoring on what is most salient and an ongoing understanding of how impacts may evolve over time.
 

✓ Pay Taxes

To improve the foundation of our economic and social systems, companies should pay their fair share in taxes to make sure that funds are available to support equitable programs.  As disruptions impact the global economy, it is critical for governments to have the funds available to absorb shocks and invest in a sustainable path towards recovery.  When companies deliberately reduce their tax obligation, it helps their bottom line, but contributes to the fragility of the system as a whole.

Disclosing Progress

Disclosure establishes accountability, provides a foundation for engagement and serves as a platform for demonstrating priorities, process and progress. See the Transparency and Disclosure section of Ceres Roadmap 2030 on how to make all of your disclosures complete, credible and decision-useful.

The Global Reporting Initiative (GRI) Standards and the Sustainable Accounting Standards Board (SASB) are two disclosure tools widely recognized as standards for comparable sustainability disclosure. Disclosure related to corporate efforts to build a just and inclusive economy should also be guided by an additional disclosure framework that helps to strengthen corporate disclosure and meet the expectations of stakeholders, in particular investors: the United Nations Guiding Principles (UNGP) Reporting Framework. 

The UNGP Reporting Framework, published in 2015, provides comprehensive guidance for companies reporting on management approaches and systems for respecting human rights in direct operations and across value chains. Most significantly, the reporting framework introduces the concept of saliency, calling on companies to first assess priorities through the lens of risks to people (rightsholders) versus risks to the business. Through this change in perspective, companies are able to identify and act on the human rights challenges that present the most severe risks to people.

Supported by investor interest, companies should prioritize disclosure of the following specific metrics:
 

  • Equal Employment Opportunity Data - Year-over-year data collected on equal employment opportunity (EEO-1 Form for U.S. employees) disaggregated by gender, race, ethnicity and job category 
  • Wage Data - Data detailing wages, benefits and pay ratios, disaggregated by gender, race, ethnicity and job category
  • Tax Payments - How the approach to tax is embedded within the organization and country-by-country reporting of tax-related information for each jurisdiction in which the organization operates. For more information go to GRI 207: Tax Guidance.


Additional Disclosure Resources

Ceres: Disclose What Matters -  Analyzes the sustainability disclosures of the world's largest companies and can help companies bridge the gap and provide executable, relevant information to investors.

Workforce Disclosure Initiative - Provides a common set of questions through an annual survey for companies from all sectors to disclose their management of human rights and human capital issues across the value chain. The WDI platform allows companies to demonstrate to their investors, clients and other stakeholders how their approach to workforce management is aligned with their business strategy.

Resources

With respect to a just transition, there are many programs, resources and materials available to help guide companies. Below is a list of some key resources:

Just Transition: A Business Guide - This guidance responds to requests from companies that want operational advice on how to implement a just transition. It has been prepared via a unique cooperation between companies, unions and experts, led by The B Team and the International Trade Union Confederation (ITUC)’s Just Transition Centre.

Climate Change and the Just Transition: A Guide for Investor Action - This guide sets out how investors can pursue the goal of a just transition as part of their core operating practices.

International Labour Organization’s Declaration on Fundamental Principles and Rights at Work - Adopted in 1998, the Declaration commits member states to respect and promote principles and rights in four categories: freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.

United Nations Guiding Principles on Business and Human Rights - Provides an authoritative global standard for preventing and addressing the risk of adverse human rights impacts linked to business activity.

Corporate Human Rights Benchmark - A collaboration led by investors and civil society organisations to assess 200 of the largest publicly traded companies in the world on a set of human rights indicators.

Companies in Action

Orsted boosts renewable energy job market in Europe. The transition from a fossil intensive economy to a low-carbon future is poised to bring significant socio-economic opportunities for growth and job creation. Among the most fuel intensive companies in Europe a decade ago, Orsted, the largest energy company in Denmark, has shifted into alternative energy sources and new business opportunities. Driven by the need to urgently address the climate crisis, the company in 2017 started divesting from its oil and gas business. Today, the company is on a path to phase out coal by 2023 and generate nearly 100% renewable energy by 2025. Orsted estimates its offshore wind farms, both installed and under construction, will create 197,000 job years in their lifetime, employing more than 5,400 European citizens in life-long employment. In Taiwan, Orsted has established an apprenticeship program with DaYeh University to train future offshore wind operations and maintenance technicians. Orsted is also collaborating with local governments in Taiwan, working with county government, to develop local supply chains for wind turbines, creating new job opportunities in the process. 

JP Morgan Chase makes global investment in the future of work. Rapid technology advances are encouraging companies across sectors to rethink and invest in educational opportunities that ensure that current and prospective employees are equipped with the skills needed to thrive in the future. To address this, JP Morgan Chase created a five-year initiative aimed at helping people develop critical skills for in-demand careers through new investments in strengthening education and training programs. The $350 million global investment launched in 2019 builds on the company’s original commitment of $250 million announced in 2013, designed to give students without college degrees access to middle skills jobs. That program helped nearly 150,000 individuals across 37 countries. JP Morgan Chase's New Skills at Work program announced in 2019 has a dual approach: expand the reach of the training to create economic opportunities and career mobility for underserved populations and identify and prepare the company's own employees for the workplace skills needed in the future. The company will work with the Massachusetts Institute of Technology’s Initiative on the Digital Economy to identify and forecast the skills of the future workforce, looking to accelerate opportunities internally to enable employees to acquire the skills required to keep up with technology advances. The company plans to share this work with peer employers and others in the industry to scale impact as they look to prepare the workforce of the future. 

AT&T focuses on retraining employees to acquire the necessary skills to keep up with advancements in technology.  As automation continues to gain momentum, companies are faced with the need to fill highly technical positions. Many are addressing this by retraining their workforce, providing the necessary tools to advance and adjust to evolving technologies. Through its Future Ready program, AT&T is committed to investing and training its workforce to help them acquire the skills necessary to conduct business in the next decade. The company conducted an analysis of its 250,000 person workforce and discovered that only half had the necessary skills to remain competitive in the digital economy. AT&T launched online training platforms and a career intelligence portal that lets workers see what jobs are available, the skills required for each, the potential salary range and whether that particular area is projected to grow or shrink in the years ahead. In 2019, the company noted that, out of approximately 18 million total hours of training recorded, AT&T employees spent about 2 million hours in skills transformation.

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