Investment groups Friends Provident Foundation and Royal London Asset Management have called on utility companies to create public roadmaps for moving away from the use of fossil fuels.
The financial groups have called on utilities to “assess the social impact of their decarbonisation plans” and create policies that will mitigate any disruption to local communities as fossil fuel plants close and the cost of energy fluctuates.
Carlota Garcia-Manas, senior responsible investment analyst at Royal London, said that power companies must “proactively discuss and address the social impacts that many people may feel as a result of the energy transition”, whether that includes how the workforce might change, to the cost of energy.
Utilities have come under increasing pressure to replace their fossil fuel energy production with renewables as the UK targets net-zero carbon emissions by 2050, but research shows that this could create widespread upheaval in the job market. At the 2018 COP24 climate conference, 53 countries signed the Just Transition Declaration, which recognised the need to factor in the needs of workers and communities to build public support for a rapid shift to net-zero.
The call comes on the back of utility giant SSE publishing a “Just Transition” paper outlining 20 objectives for the company to work with communities as it transitions to green energy production. This includes a plan to invest close to £4 million per day on low-carbon initiatives over the next five years. Its targets include boosting diversity and inclusion, investing in low-carbon energy development, retraining people working in high-carbon industries, and helping vulnerable people gain access to technology such as smart meters.
SSE’s chief sustainability officer, Rachel McEwen, said the government’s ambition to reach net-zero emissions “brings a risk that some people are left behind”.
Colin Baines, investment engagement manager with Friends Provident Foundation, said that SSE’s strategy “sets the standard for other energy utilities to follow and we hope to see more as we approach COP26 next year.”