Grantham Research Institute and LSE join forces for net-zero push

Two major academic institutions have partnered to launch the Just Transition Finance Lab, which aims to push the net zero transition and nature-positive economy through a people-centred approach.

The London School of Economics and Political Science and Grantham Research Institute on Climate Change and the Environment said the collaborative venture will highlight the opportunities from financing climate action, such as better jobs, gender equality and community renewal.

The Lab has four priorities for 2024. First, to design and deploy financial instruments and strategies. This will be achieved by launching a programme on how to design transition plans and finance, with a focus on encouraging practical adoption. It will partner with the Climate Bond Initiative to promote the role of bond assurance to drive net-zero transition.

The second is to establish effective metrics to measure performance by developing a programme to combine existing practice, listen to market and policy needs and suggest ways to encourage adoption. A key focus will be on stakeholders and how they can be involved in evaluating performance.

Third, the Lab aims to identify and achieve policy reforms. It will work with the Grantham Research Institute’s Climate Change Laws of the World project team to assess just transition policies. Further, there will be a review of the role of development bank policy and practice in supporting the just transition.

These priorities will generate case studies to build confidence and greater adoption of just transition finance, said a statement from the organisations. For example, the first case study will address the energy transition, examining emerging examples of how fossil fuel phase-out and clean energy scale-up can be just.

The focus in 2024 will be on the UK and India. In the UK, place-based just transition investment plans will be explored, and in India, the Lab will work with partners to develop sustainable finance innovations to achieve the country’s 2070 net-zero target.

This collaboration comes at a time of a greater awareness of the just transition, where at COP28, governments adopted the first Just Transition Work Programme.

The Lab’s executive director, Nick Robins, said: “The just transition is more urgent than ever before and achieving it is not straightforward. The Just Transition Finance Lab will focus on the ways that financial practice can be redesigned and serve change.

“To succeed, the Lab must be a collaborative venture, where financial leaders come together with others to explore these challenges and the crucial role their industry can play.”